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Managerial Accounting > EVERY MANAGERIAL ACCOUNTING CHAPTER > Flashcards

EVERY MANAGERIAL ACCOUNTING CHAPTER Flashcards

[Note: Stopped at page 25 in the book ]

1
Q

What is an Activity Base?

A

A measure of what causes a variable cost

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2
Q

What are Administrative Costs?

A

Costs associated with the general management of an organization

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3
Q

What are committed fixed costs?

A

Investments in facilities, equipment, and structure that can’t be reduced w/o significant change

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4
Q

What is a Common Cost?

A

costs that cannot be traced to a individual cost object

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5
Q

What is the Contribution approach?

A

An income statement format organizing costs by behavior.

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6
Q

What is a Contribution Margin?

A

How much remains from sales revenue after all variable expenses are deducted

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7
Q

What is the Conversion Cost Formula?

A

Direct labor + Manufacturing Overhead

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8
Q

What is cost behavior?

A

How costs react to changes in activity levels

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9
Q

What is a cost object?

A

Anything for which cost data is desired.

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10
Q

What are cost structures?

A

The proportion of fixed, variable and mixed costs in an organization

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11
Q

What is a differential cost?

A

costs that differ between two alternatives

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12
Q

What is differential revenue?

A

revenue that differs between alternative goods

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13
Q

What are direct costs?

A

costs that can be traced back to a specific cost object

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14
Q

What is direct labor?

A

factory labor costs related to a specific products creation

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15
Q

What are direct materials?

A

materials that become a part of a finished product; can be traced

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16
Q

Discretionary fixed costs are..

A

costs that come from advertising and research decisions

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17
Q

What is Financial Accounting?

A

Accounting that reports financial history to stockholders, creditors, and regulators.

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18
Q

What are finished goods?

A

products that have not been sold

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19
Q

What is a fixed cost?

A

constant costs that do not change with the level of activity

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20
Q

What is a Incremental cost?

A

a increase in cost between two alternative goods

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21
Q

What is a Indirect cost?

A

a cost that is difficult to trace back to a cost object

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22
Q

What is indirect labor?

A

the labor cost of janitors, supervisors, material handler, and other factory workers

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23
Q

What are indirect materials?

A

materials such as glue and nails that cannot be easily traced

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24
Q

What is managerial accounting?

A

accounting that provides information to managers

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25
Q

What is manufacturing overhead?

A

manufacturing costs outside of direct materials and labor

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26
Q

What is a mixed cost?

A

costs with both variable and fixed cost elements

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27
Q

What is an opportunity cost?

A

benefits given up for something else

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28
Q

What is a period cost?

A

cost taken directly to the income statement as expenses

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29
Q

What is the prime cost formula?

A

direct materials + direct labor

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30
Q

What are product costs?

A

costs involved in making a good

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31
Q

What are raw materials?

A

materials that go into making a good

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32
Q

What is a relevant benefit?

A

a benefit that should be considered when making a decision

33
Q

What is a relevant cost?

A

cost that should be considered when making a decision

34
Q

What is a relevant range?

A

the range of activity within which assumptions about variable and fixed cost behavior are valid

35
Q

What are selling costs?

A

cost incurred to secure orders and send out a good

36
Q

What is a sunk cost?

A

cost that cannot be changed by any decision

37
Q

What is a variable cost?

A

a constant per unit cost, that changes in proportion to activity levels

38
Q

What is a work in process?

A

partially complete units of product

39
Q

What is absorption costing?

A

a costing method that includes all manufacturing costs in unit product costs

40
Q

What is a bill of materials?

A

a document detailing how much material is needed to manufacture a product

41
Q

What is a cost driver?

A

factors that cause overhead costs

42
Q

What is an example of a cost driver?

A

machine-hours, flight-hours, and computer time

43
Q

What is cost-plus pricing?

A

a pricing method where a predetermined price markup is applied to a cost base in order to determine the target selling price

44
Q

What is a job cost sheet?

A

a document recording the direct materials, direct labor, and manufacturing overhead

45
Q

What is Job-order costing?

A

a system used when several different goods are produced each period

46
Q

What is the multiple predetermined overhead rate?

A

a system with multiple overhead cost pools that have a different overhead rate each

47
Q

What is a normal cost system?

A

a system that applies overhead cost to jobs by multiplying a predetermined overhead rate by actual amount of allocation base

48
Q

What is overhead application?

A

assigning overhead to a job

49
Q

What is a plantwide overhead rate?

A

a single overhead rate used through a plant

50
Q

What is the predetermined overhead rate?

A

a rate used to charge overhead to a job in advance

51
Q

What is a time ticket?

A

a document recording how much time a employee spends on a task

52
Q

What is a schedule of cost of goods manufactured?

A

A schedule summarizing the portion of product cost remaining in WIP and sent out to finished goods

53
Q

What is a schedule cost of goods sold?

A

A schedule summarizing the portions of costs remaining in ending finished goods and transferred out to cost of goods sold

54
Q

What is under-applied overhead?

A

occurs when overhead applied to WIP is less than the overhead actually incurred

55
Q

What are equivalent units?

A

the number of complete units that could be obtained from the materials and labor in partially completed units

56
Q

What are equivalent units of production?

A

units transferred to the next department (or finished goods) during the period + equivalent units in the department’s ending WIP inventory

57
Q

What is the FIFO method?

A

A process costing method that calculates unit costs based solely on the costs and outputs from the current period

58
Q

What is operation costing?

A

a hybrid costing system used when products have some common and some individual characteristics

59
Q

What is process costing?

A

a costing method used when homogeneous products are produced on a continuous basis

60
Q

What is the processing department?

A

where work is performed on a product

61
Q

What is the weighted-average method?

A

a process costing method that calculates unit costs by combining costs and outputs from past a present periods

62
Q

What is the Break-even point?

A

the level of sales where profit is zero

63
Q

What is a contribution approach?

A

An income statement separating costs int variable and fixed categories

64
Q

What is the contribution margin ratio?

A

contribution margin / sales

65
Q

What is the cost-volume-profit graph?

A

a graph representing the relationships between an organization’s revenues, costs, profits, and its sales volume.

66
Q

What is the degree of operating leverage?

A

a measure of how a percent change in sales volume affects profits

67
Q

What is incremental analysis?

A

analysis focusing changes in cost and revenues caused by a decision

68
Q

What is the margin of safety?

A

excess sales over the break-even dollar sales

69
Q

What is operating leverage?

A

A measure of how sensitive net operating income with a percentage change in unit sales

70
Q

What is the sales mix?

A

the proportion in which a company’s products are sold

71
Q

What is target profit analysis?

A

an estimate of the level of sales needed to achieve a desired target profit

72
Q

What is the variable expense ration formula?

A

variable expenses / sales

73
Q

How are costs classified?

A

Either as direct or indirect

74
Q

Examples of manufacturing overhead includes..

A

equipment depreciation, utility costs, property taxes, and insurance premiums

75
Q

What are other names for manufacturing overhead?

A

indirect manufacturing cost, factory overhead, factory burden

76
Q

What are other names for selling costs?

A

ordergetting, or order-filling costs

77
Q

Examples of selling costs

A

Advertising, shipping, sales travel, commissions, sales salaries, and warehouses

78
Q

Examples of administrative costs?

A

general accounting, legal counsel, public relations, and secretarial costs

79
Q
A

Managerial Accounting (5 decks)

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