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Acct 3121 > Exam 1 > Flashcards

Exam 1 Flashcards

1
Q

Relevant Range

A

Range where amount or volume of an activity where a specific relationship exists between cost and cost driver.

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2
Q

A unit cost is also called an ________.

A

Average cost

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3
Q

What are the three types of inventory?

A

Direct materials, work-in-process, and finished goods.

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4
Q

Inventoriable Cost

A

Is considered an asset on the balance sheet when incurred and expensed as COGS when product is sold.

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5
Q

Period Costs

A

All costs on income statement other than COGS.

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6
Q

COGM Formula

A

Beginning WIP Inventory + Manufacturing Costs - Ending WIP Inventory

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7
Q

Manufacturing Costs formula

A

Direct Materials + Direct Manufacturing Labor + Manufacturing Overhead

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8
Q

Direct Materials formula

A

Beginning inventory + Purchases - Ending Inventory

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9
Q

COGS Formula

A

Beginning Finished Goods + COGM - Ending Finished Goods

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10
Q

Gross Margin formula

A

Revenue - COGS

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11
Q

Operating Income formula

A

Gross margin - Operating Costs or Gross margin - Period Costs

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12
Q

Prime Costs formula

A

Direct Materials + Direct Manufacturing Labor

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13
Q

Conversion Costs

A

Direct Manufacturing Labor + Manufacturing Overhead

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14
Q

Variable Cost

A

changes in total level in proportion to changes in volume

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15
Q

Fixed Cost

A

does not change in total level as volume changes

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16
Q

Period Cost

A

all costs on income statement other than COGS. Operating costs

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17
Q

Product Cost

A

costs assigned to product for specific situation/purpose. (Ex. R&D, Design, Production, Marketing, Distribution, Customer Service)

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18
Q

VC per Unit with High-Low Method

A

(Cost from Highest Cost Driver - Cost from Lowest Cost Driver) / (Highest Cost Driver - Lowest Cost Driver)

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19
Q

Fixed Cost using High-Low Method

A

intercept of VC per unit

20
Q

Contribution Margin

A

Revenues - VC

21
Q

Operating Income by CM

A

Contribution Margin - Fixed Costs

22
Q

CM %

A

CM / Revenues

23
Q

Break Even Units

A

Fixed Costs / CM per Unit

24
Q

Break Even Revenues

A

Fixed Costs / CM%

25
Q

Revenues for Target Op Income

A

(FC + Target Op Income) / CM%

26
Q

Net Income Formula

A

Operating Income - Income Taxes

27
Q

Margin of Safety

A

Budgeted or Actual Revenues - Break Even Revenues

28
Q

Margin of Safety %

A

Margin of Safety ($) / Revenues

29
Q

Degree of Operating Leverage

A

CM / Operating Income

30
Q

CM Income Statement Order

A

Revenue - VC = CM
CM - FC = Operating Income

31
Q

Direct Costs use _______ to a cost object.

A

Cost Tracing

32
Q

Indirect Costs use ______ to a cost object.

A

Cost Allocation

33
Q

Actual Indirect Cost Rate

A

Actual Indirect Costs / Q of Allocation Base

34
Q

Budgeted Indirect Cost Rate formula

A

Budgeted Indirect Costs / Q of Allocation Base

35
Q

Normal Costing

A

traces direct costs using actual direct cost rates and actual quantities of allocation base, and budgeted indirect cost rates and actual quantities of allocation base.

36
Q

Actual Costing differs from Normal Costing in _____________.

A

It uses end-of-year actual indirect-cost rates instead of budgeted

37
Q

Adjusted Allocation Approach

A

Restate all overhead entries with new rate; based on actual-amounts from year-end.

38
Q

Proration Approach

A

Spreads difference amongst Finished Goods, WIP and COGS. based on the amount of overhead already allocated before Proration. NOT account balance. Then add proration to account balance for ending balance.

39
Q

In the proration and COGS approach, the credit to Manufacturing Overhead Control should be for the amount ________.

A

Of TOTAL actual overhead at the end of the year.

40
Q

Write-off to COGS approach

A

Included in this year’s COGS expense.

41
Q

What approach for income statement with ACTUAL amounts and difference is BIG (inventory high)?

A

Proration, most accurate.

42
Q

What approach for income statement with ACTUAL amounts and difference is SMALL (inventory low)?

A

Write-off to COGS, good approximation.

43
Q

What approach for accurate cost analysis, management, etc, and difference is BIG?

A

Adjusted Allocation-Rate, more accurate for individual jobs.

44
Q

What are the two main changes from Normal Costing to ABC?

A

Trace more costs to Direct Costs and increase number of indirect-cost pools.

45
Q

Cost Hierarchy

A

Output Unit-Level
Batch-Level
Product-Sustaining
Facility-Sustaining

Acct 3121 (2 decks)

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