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Managerial Accounting > Concepts > Flashcards

Concepts Flashcards

1
Q

What is prime cost

A

Direct materials
+
direct labour

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2
Q

Product/manufacturing costs include

A

Direct materials

direct labour

manufacturing overhead

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3
Q

Whats conversión cost

A

Direct labour
+
MOH

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4
Q

Schedule of COGM

A

MANUFACTURING COSTS:
Direct materials
+beg raw materials inv
+purchases
-less ending raw materials inv
Direct labour
MOH
+moh applied

COSTS OF GOOD MANUFACTURING:
+total manufacturing costs
+Add beg work in progress
-Deduct end work in progress

COGS
cost of goods manufactured
Add beg finished goods Inv
Deduct end finished goods inv
+underaplied overhead

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5
Q

Contribution margin

A

Sales -variable cost

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6
Q

Contribution margin ratio

A

CM ratio=CM/sales

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7
Q

Break even point (units)

A

=fixed costs/CM per unit

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8
Q

Break even (dollars)

A

Break even sales=fixed costs /CM ratio

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9
Q

HIGH-low method (variable cost per unit)

A

Variable Cost=Change in Cost/Change in Activity

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10
Q

Total Mixed Cost:

A

Y=a+bXY=a+bX

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11
Q

Contribution Margin (CM) description

A

the amount remaining from sales revenue minus variable expenses have been deducted.

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12
Q

variable expense ratio

(amount of sales going to variable expenses)

A

total variable cost / sales

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13
Q

Change in CM

A

CM Ratio × Change in Sales

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14
Q

Formula for units sold to reach target profit:

selling goal per unit:

A

(Fixed Costs + Target Profit) / CM per unit.

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15
Q

Formula for sales dollars to reach target profit:

sales revenue goal:

A

(Fixed Costs + Target Profit) / CM Ratio.

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16
Q

Margin of Safety

A

Actual Sales – Break-even Sales

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17
Q

Percentage Margin of Safety:

A

(Margin of Safety / Actual Sales).

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18
Q

break even units (more than one product sold)

A

Total Fixed Costs / Weighted Average CM per unit.

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19
Q

Formula for units to reach target profit:

A

(Fixed Costs + Target Profit) / CM per unit.

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20
Q

Formula for sales dollars to reach target profit:

A

(Fixed Costs + Target Profit) / CM Ratio.

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21
Q

High fixed costs resulting in?

A

lead to higher operating leverage, meaning more risk but greater potential for profits in good years.

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22
Q

Job Cost Sheet definition

A
  1. tracks costs associated with a specific job, including product costs
  2. summarizes the costs and provides basis for cost accounting
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23
Q

Predetermined Overhead Rate: POHR

A

= estimated overhead cost / estimated allocation base

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24
Q

total overhead cost per job (applied)

A

direct labour hours x POHR

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25
Q

work in progress ending balance formula. ABC costing

A

WIPEndingBalance=

WIPBeginningBalance+

DirectMaterials used+

DirectLabour used+

AppliedManufacturingOverhead
(MOH) +

26
Q

what do you do with underapplied moh and overapplied moh

A

underapplied =
debit the difference to COGS (the underapplied)
credit MOH

over applied =
credit the difference to COGS (the overapplied)

debit MOH

27
Q

formula for under applied OH

A

underapplied oh = actual oh - applied oh

28
Q

formula for overapplied OH

A

overapplied oh

= applied oh - actual oh

29
Q

applied OH formula

A

applied OH = POHR x AMH (actual machine hours)

30
Q

how do you know if its under or over applied

A

if actual is higher than applied = underapplied

if actual is less than applied = over applied

31
Q

when there were more moh costs than estimated, what is it called?

A

underapplied moh

32
Q

when there were less MOH costs than estimated what is it called?

A

overapplied moh

33
Q

Activity Rate in ABC:

A

Total cost of activity pool / total activity measure (e.g., machine-hours or orders).

34
Q

Levels of Activity in ABC:

A

a. Unit-Level: Performed each time a unit is produced (e.g., power consumption).

b. Batch-Level: Performed once per batch, regardless of the batch size (e.g., machine setup).

c. Product-Level: Activities for specific products (e.g., product design).

d. Customer-Level: Activities for specific customers (e.g., customer support).

e. Organization-Sustaining: Activities that support the organization as a whole, regardless of production or sales (e.g., factory maintenance, executive salaries).

35
Q

total cost of product formula under absorption costing

A

Direct materials per product+ direct labour per product + MOH per product

36
Q

steps for Calculation to get total cost per job completed

A
  1. Get activity rate, multiply it by the applicable activity incurred
    1. Add up all the costs
37
Q

break even price per unit

A

(direct costs + MOH per job)/units required for the job to complete

38
Q

Absorption Costing 5 characteristics

A

a. Treats all manufacturing costs (fixed and variable) as product costs.

b. Unit cost = Direct materials + Direct labor + Variable manufacturing overhead + Fixed manufacturing overhead.

c. Fixed overhead is deferred into inventory until the product is sold.

d. Required for external financial reporting (GAAP).

e. Increased production (even if units aren’t sold) increases reported income due to deferred fixed costs.

39
Q

Variable Costing:

A

a. Only variable manufacturing costs are treated as product costs.

b. Unit cost = Direct materials + Direct labor + Variable manufacturing overhead (Fixed manufacturing overhead is a period cost).

c. Fixed manufacturing overhead is expensed in the period incurred, not tied to the number of units produced.

d. Easier for internal decision-making and CVP (Cost-Volume-Profit) analysis because it clearly separates variableand fixed costs.
Selling and administrative expenses are always treated as period costs, regardless of method.

40
Q

Formula for Reconciliation:

A

a. Variable Costing Income+Fixed MOH Deferred (or Released)=Absorption Costing Income

		i. Deferred costs: When production > sales (inventory increase).
		ii. Released costs: When sales > production (inventory decrease).
41
Q

Final oh cost deffered formula

A

Final oh cost deffered = (MOH per unit) x (units ending inventory)

42
Q

fixed moh per unit formula

A

total fixed moh / units produced

43
Q

ending invetory formula for income statement under variable costing

A

units in ending inventory * variable cost per unit (dm+dl+dmoh)

44
Q

What does CRM stand for?

A

Customer Relationship Management.

45
Q

Describe the 80/20 Rule in CRM.

A

20% of customers generate 80% of profits.

46
Q

Key elements of a customer-centric approach?

A

Identification, differentiation, interaction, customization.

47
Q

What is Collaborative CRM?

A

ntegrates all customer interactions (marketing, sales, service).

48
Q

What does RFM stand for in CRM?

A

Recency, Frequency, Monetary value.

49
Q

List the CRM process steps.

A

Target customers → Segment into high/low-value → Reduce churn.

50
Q

Difference between CRM strategy and CRM system?

A

customer focus; System = tools supporting strategy.

51
Q

Define Customer Touch Points.

A

Methods of customer interaction: traditional (calls) & digital (web, email).

52
Q

What is the 360-degree view in CRM?

A

Complete, integrated customer data accessible to all employees.

53
Q

Three phases of CRM evolution?

A

Reporting, Analysis, Predicting.

54
Q

Operational CRM vs. Analytical CRM?

A

Operational = front-office interactions; Analytical = back-office data analysis.

55
Q

Examples of Customer-Facing CRM?

A

Call centers, sales force automation (SFA), marketing campaigns.

56
Q

Examples of Customer-Touching CRM?

A

Self-service options like FAQs, loyalty programs, chatbots.

57
Q

Role of AI in CRM?

A

Insights, automated support, lead scoring, sentiment analysis.

58
Q

Define Cross-Selling.

A

Recommending related products based on past purchases.

59
Q

Example of CRM metrics?

A

Customer retention, revenue per customer, service costs.

60
Q

What is Upselling?

A

Offering higher-value or premium products to customers.

Managerial Accounting (3 decks)

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