Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

2021 - ManAcc I > Cost and Cost Behavior > Flashcards

Cost and Cost Behavior Flashcards

1
Q

Management accounting aims…

A

…to provide info to management in order to help them make decisions that will result in max shareholder value.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

FR vs Management accounting

A 
External / internal users
Framework (IFRS, none)
Reporting period (past, past & future)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Cost behavior is…

A

…the relationship between cost and activity. Helps us understand costs and what drives them up.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Variance is…

A

…the diff between our set budget and what we actually did

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Fixed costs

A

behavior stays the same

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Variable costs

A

change depending on activity level

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Cost behavior helps us to…

A

(variable / fixed)

  • plan & budget costs
  • control costs
  • make decisions
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Cost traceability helps us to…

A

(direct or indirect)

estimate the cost of goods and services

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Cost controllability helps us to…

A

(controllable / uncontrollable)

measure the performance of departments and managers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Value chain helps us to…

A

(upstream / downstream)

analyze cost structure and identify strategies to control and manage costs and how they are incurred

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Manufacturing costs examples

A

direct material
direct labor
manufacturing overheads

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Timing of expenses examples

A

period costs

product costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Managers objectives

A
  • develop & pursue a strategy for managing the bus

- maximize shareholder wealth

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What do managers need to know so they pursue their objectives?

A
  • they need to understand the bus environment

- need to know which economic cycle they’re in

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Managerial decision-making process

A
  1. identify objectives
  2. search for alternative courses of action
  3. select appropriate courses of actions
  4. implement decisions
  5. compare planned & actual outcomes
  6. respond to divergencies from the plan
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Cost estimation is…

A

the process of determining cost behavior, often focuses on historical data

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Cost prediction is…

A

using knowledge of cost behavior to forecast the cost level of a particular activity level

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Cost objective is…

A

any activity for which a separate measurement of cost is required

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Direct costs are…

A

directly / physically traced to your p&s

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

How are indirect costs allocated?

A

Using an allocation base

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Prime cost =

A

DL + DM + Direct exp

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Production cost =

A

Prime cost + manufacturing overheads

23
Q

Total cost =

A

Production cost + other overheads

24
Q

If a cost is controllable…

A

management can influence the cost (quantity and price paid)

25
Q

If a cost is uncontrollable…

A

management can’t influence the cost

26
Q

Three levels to assess performance

A
  • Cost level
  • Price
  • Activity level
27
Q

Product costs are…

A

costs identified with the goods purchased for resale or produced for sale

28
Q

Non-manufacturing costs are…

A

necessary to keep the business activities going but aren’t involved in the physical manu process (period costs)

29
Q

What converts raw mat to FG?

A

labor and manu overheads

30
Q

Period costs are…

A

costs incurred during a period of time that are not calculated into the cost of goods sold

31
Q

Inv costs should include…

A
  • conversion costs
  • purchase costs
  • costs incurred to bring it to present location
32
Q

Inv costs should NOT include…

A
  • abnormal waste
  • storage costs
  • selling costs
  • admin costs not related to production
33
Q

Value chain definition

A

A set of integrated value-creating activities. By examining value chain, the bus can change their activities and reduce supplier cost.

34
Q

Value chain examples

A
  • research & development
  • design
  • production
  • marketing
  • distribution
35
Q

Support services examples

A

IT, HHR, telecommunications

36
Q

Differential costs are…

A

the diff between the costs of each alternative action under consideration (incremental costs)

37
Q

Irrelevant costs are…

A

future costs and revenues that will not be affected by a decision

38
Q

Opportunity costs are…

A

costs that measure the opportunity sacrificed when the choice of one course of action requires that an alternative is given up

39
Q

Sunk costs are…

A

costs that have been incurred by a decision made in the past and that cannot be changed by any future decision

40
Q

Unavoidable costs are…

A

costs that cannot be saved, whether or not an alternative is adopted

41
Q

Direct material / labor costs are…

A

costs that specifically & exclusively identify with a particular cost object

42
Q

Indirect costs are…

A

costs that cannot be specifically & exclusively identify with a particular cost object

43
Q

Mixed costs are…

A

contain both a fixed & variable components

44
Q

Semi/Step-fixed costs are…

A

remain fixed within specific activity levels for a specific amt of time but eventually inc/dec by a constant amt of critical activity levels

45
Q

Nature of costs

A

non-manu / manu

direct / indirect

46
Q

Behavior of costs

A

variable / fixed

47
Q

Cost drivers…

A

drive costs up and down

48
Q

What is a cost?

A

A resource sacrificed in order to achieve a certain obj.

49
Q

Primary material?

A

the basic raw material converted to FG (direct cost)

50
Q

Secondary material?

A

used in manufacturing process which contributes to the conversion process (indirect costs)

51
Q

What affects productivity?

A
  • Employee attitude towards work / the employer
  • Capacity at which employees work
  • Employee skills
  • Work env
52
Q

Different employment records?

A
  • personnel: employee history, contract
  • job cards: time spent on task
  • clock cards: supplies indisputable evidence of employee attendance
  • production reports: total hours worked
53
Q

Curvilinear cost?

A

an expense that increases at an inconsistent rate as production volume increases

54
Q

Step-variable cost?

A

a cost that generally varies with activity level but tends to be incurred at certain discrete points and to involve large changes in amount when these points are reached

2021 - ManAcc I (11 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions