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managerial accounting > exam 2 (5-10) > Flashcards

exam 2 (5-10) Flashcards

1
Q

cost pool

A

the sum of resources related to a particular activity undertaken in response to customer demand or need

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2
Q

cost driver

A

the characteristic selected for measuring the quantity of the activity for a particular period of time

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3
Q

activity

A

a discrete task or step in a manufacturing or service process

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4
Q

resource

A

a cost or expense incurred by a company

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5
Q

production department costs

A

costs that are incurred by the production department

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6
Q

support department costs

A

costs allocated from other departments

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7
Q

practical capacity

A

the maximum possible volume of activity, while allowing for normal downtime for repairs and maintenance

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8
Q

how to calculate the POHR in ABC?

A

(total overhead cost pool) / ( budgeted activity driver) = POHR

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9
Q

how to know if a customer is profitable?

A

customer-specific gross profits > customer-specific costs

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10
Q

activity-based management

A

the identification and selection of activities to maximize the value of the activities while minimizing their cost from the perspective of the final customer

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11
Q

relevant range

A

the range of the activity where TOTAL fixed costs and variable cost PER UNIT remain constant

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12
Q

step costs

A

costs that increase abruptly at certain intervals in a “step” pattern

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13
Q

curvilinear costs

A

increase at a consistent rate as activity levels increase

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14
Q

the formula for break-even sales?

A

total variable costs + fixed costs = break even sales

or

(variable cost x units sold) + fixed costs = Sales price x units sold

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15
Q

the formula for variable costs?

A

variable cost x units sold = variable costs

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16
Q

the formula for break-even units?

A

fixed costs / unit contribution margin

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17
Q

the formula for unit contribution margin?

A

sales price - variable cost

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18
Q

what is another formula for break-even sales?

A

fixed costs / contribution margin ratio = break even sales

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19
Q

how to calculate net operating income

A

contribution margin - fixed costs = net operating income

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20
Q

contribution margin

A

the amount available to cover fixed costs and generate profits

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21
Q

the formula for the contribution margin ratio?

A

contribution margin / sales = contribution margin ratio

22
Q

contribution margin ratio

A

Tell managers the amount from each sales dollar that is contributing margin

23
Q

the formula for desired sales?

A

total variable costs+ fixed costs + desired net income = desired sales

24
Q

the formula for desired units?

A

(fixed costs + desired net income) / unit contribution margin = desired units

25
Q

the formula for desired sales revenue?

A

(fixed costs + desired net income) / contribution margin ratio = desired sales revenue

26
Q

the formula for margin of safety units?

A

actual sales units - break-even sales units = margin of safety units

27
Q

the formula for margin of safety revenue?

A

actual sales revenue - break-even revenue = margin of safety revenue

28
Q

the formula for operating leverage?

A

contribution margin / net operating income = operating leverage

29
Q

the formula for % change in operating income?

A

% change in sales x operating leverage = % change in operating income

30
Q

when should you use absorption costing?

A

when you produce more than you sold

you will have a higher net income under absorption costing

31
Q

when should you use variable costing?

A

when you sell more than you produce

you will have a high net income under variable costing

32
Q

the formula for net income?

A

Sales - COGS = Gross profit - SG&A costs(selling, general, and administrative costs) = NI

33
Q

the formula for unit product cost under absorption costing?

A

Unit variable product cost + (Total fixed product costs / Units Produced) = unit product cost(absorption costing)

34
Q

the formula for absorption cost of goods sold?

A

absorption unit product cost x units sold = COGS

35
Q

the formula for absorption SG&A costs?

A

Unit variable period costs x Units sold + Total fixed period costs = SG&A costs

36
Q

the formula for total variable COGS?

A

Unit variable product costs x Units sold = variable COGS

37
Q

the formula for total variable SG&A costs?

A

Unit variable period costs x Units sold = variable SG&A costs

38
Q

the formula for total fixed costs under variable costing?

A

Fixed product costs + Fixed period costs = total variable fixed costs

39
Q

relevant cost

A

a cost that differs between alternatives

40
Q

future cost

A

a cost that will be incurred in the future

41
Q

opportunity costs

A

future benefits forfeited due to a particular choice

42
Q

formula for the advantage of accepting the special order?

A

Increase in revenue - increase in production costs - added FC = advantage of accepting the special order

43
Q

how to know if you should sell or process further?

A

focus on the contribution margin

44
Q

how to deal with a constrained resource?

A

focus on the contribution margin

45
Q

the formula for budgeted sales revenue? (budgeting)

A

sales forecast x expected sales price = budgeted sales revenue

46
Q

the formula for budgeted unit production? (budgeting)

A

sales forecast + desired ending inventory - expected beginning inventory = budgeted unit production

47
Q

the formula for direct materials purchase? (budgeting)

A

units of material to be purchased x average unit price = direct materials purchase

48
Q

the formula for total direct labor cost? (budgeting)

A

direct labor hours required x hourly rate = total direct labor cost (budgeting)

49
Q

the formula for total manufacturing overhead? (budgeting)

A

(unit variable overhead x cost driver level) + total fixed overhead = total manufacturing overhead (budgeting)

50
Q

the formula for selling and administrative expenses? (budgeting)

A

variable expenses + fixed expenses = selling and adminstrative expenses (budgeting)

51
Q

when is a cost variance favorable?

A

when the actual is less than the standard

managerial accounting (3 decks)

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