Ch 19-21

Question 0

Costs that remain constant in total dollar amount as the level of activity changes are called

Answer 0

fixed costs

Question 1

Three most common cost behavior classifications

Answer 1

fixed cost, variable cost, mixed cost

Question 2

Most operating decision of management focus on a narrow range of activity called

Answer 2

the relevant range of production

Question 3

The systematic examination of the relationships among selling prices volume of sales and production, costs and profits is termed

Answer 3

cost volume profit analysis

Question 4

The excess of sales revenue over variable cost

Answer 4

Contribution margin

Question 5

The difference between the current sales revenue and the sales at break even point is called the

Answer 5

margin of safety

Question 6

Cost volume profit analysis can not be used if costs cannot be properly classified into

Answer 6

fixed and variable costs.

Question 7

When units manufactured exceed units sold variable costing income is less than

Answer 7

absorption costing income.

Question 8

The term commonly used to describe concept whereby the cost of manufactured products is composed of direct materials cost, direct labor cost and variable factory overhead is

Answer 8

variable costing

Question 9

Under _________ costing, variable and fixed selling and administrative cwould not be included in finished goods inventory

Answer 9

absorption

Question 10

Cost that can be influenced by management at a specific level of management are called

Answer 10

controllable costs

Question 11

Management will use both _______ and ________ costing to control cost, price product and production planning

Answer 11

absorption and variable

Question 12

the contribution margin ratio is computed as

Answer 12

contribution margin divided by sales

Question 13

sales territory profitablility analysis can determin profit differences between territoties due to

Answer 13

pricing, selling costs, and type of products sold.

Question 14

The systematic examination of the differences between planned adn actual contribution margin is

Answer 14

contribution margin analysis

Question 15

The relative distribution of sales among various products sold is referred to as

Answer 15

the sales mix

Question 16

Contribution margin reporting can be beneficial for analyzing sales

Answer 16

personnel, products, and sales territory

Question 17

A formal written statement of managements plan for the future, expressed in financial terms is a

Answer 17

budget

Question 18

A flexible budget allows for

Answer 18

adjustments in activity levels

Question 19

The sales budget needs to be completed first when preparing a

Answer 19

master budget

Question 20

Captial expenditures budget is not directly associated with the

Answer 20

production budget

Question 21

When preparing the cash budget the _____________, __________, and __________ should all be considered

Answer 21

cash receipts from customers, cash payments to suppliers, and cash payments for equipments

Question 22

The prudction budget provides the starting point for the preparation of the

Answer 22

direct labor cost budget

Question 23

____________ supports the planning process by encourages requiring all organizational untis to establish their goals for the upcoming period, increasing the motivation of managers and employees by providing agreed upon expectations, and improving overall decision making by considering all viewpoints, options and cost reduction possibilities.

Answer 23

Budgeting

Question 24

The ____________ budget is used to prepare the direct materials purchases, direct labor cost, and factory overhead cost budgets.

Answer 24

production

Question 25

A variant of fiscal-year budgeting whereby a twelve month projection into the future is maintained at all times is termed

Answer 25

continuous budgeting

Question 26

High Low

Highest $ - Lowest $ = Change in $
Highest Units - Lowest Units = Change in Units

Change$$/ Change U = VC per unit
VCPU(Units)= VC - Cost = FC

Answer 26

Break Even = Sales - (VC+FC)

S$- VC = CM per Unit
Break Even Units = FC/CMPU
Calculate to Prove BE equation:
S$(BEU) - ((VC(BEU) + FC)
2. (FC+DesProfit)/CMPU

Question 27

Absorption:
 Sales
-COGS: (COGM-End Inv)
=Gross Profit
-Selling/Administrative
=Income from Operations
{{End Inv=(COGM/TotalUnits)*End Inv}}

Answer 27

Variable:
Sales
-VCOGS: (VCOGM-End Inv)
=Manufacture Margin
-VSelling/Admin
=CM
-FC:(MFC+S/AFC)
=Income from operations

Question 28

Direct Materials Purchase Budget:
3 Columns (Denim,Zipper,Thread)
Units Required (Ea Co.)
\+Desired End Inventory (Ea Co.)
=Total
-Beginning Inventory (Ea Co.)
=Total
*Price Per Unit= Total and add all columns

Answer 28

Units required= Production budget units * Price (Ea Co.)