Final Flashcards
3 types of product costs are…
Direct Materials, Direct Labor, MOH
3 categories of manufacturing overhead
Indirect Materials, Indirect Labor, Other cost
Product costs are included in ___ and are ___ when sold
Inventory, COGS
2 Basic categories of period costs…
Selling Costs, Administrative Cost
Fixed costs don’t change when…
Activity changes
Variable changes directly with…
Activity
Mixed costs use what formula
TC = VC(Variable rate x Units) + Fixed
Variable costs per unit are ___, but total variable costs ___ when activity increases
Constant, Increases
Fixed costs in total are ___, but fixed costs per unit ___ when activity increases
Constant, Decreases
Direct Labor, Direct Materials, and MOH all combine to become…
Work in Process Inventory (WIP)
Once the product is completed it becomes…
Finished Goods Inventory
Once the product is sold it becomes
Cost of Goods Sold
The formula for applying overhead is
Estimated MOH / Estimated Cost
The formula for applying overhead is called
Predetermined Overhead Rate
Overhead is applied by multiplying ___ by ___
PDOH, Actual Cost
Debit MOH when ___ MOH is incurred and credit MOH when ___ MOH
Actual, Applying *
The ending balance in MOH is…
Always zero
MOH is underapplied when there is a ___ balance
Debit
MOH is overapplied when there is a ___ balance
Credit
CVP uses a ___ income statement
Contribution Format
Break even formula is
Fixed Costs / Unit CM
Target profit formula is
(Fixed Costs + Target Profit) / CM per Unit
Budgeting begins with the ___ budget
Sales
To prepare a cash receipts or disbursements budget, you must look to ___ periods
Prior
To prepare a purchases or production budget, you must look to ___ periods
Future
The two variances in a flexible budget are ___ and ___
Activity, Spending
The difference between the actual costs and the flexible budget costs is called the ___ variance
Spending
The two basic measures are the ___ and ___
ROI, Residual Income
Return on Investment formula is
NOI / Average Operating Assests
The formula for residual income
NOI - (Required rate of return x Average Operating Assets)
What costs do not go away when a segment goes away
Common Fixed Costs
What costs do go away when a segment goes away
Traceable Fixed Costs
What is the issue with ROI
Profitable investments may be rejected
A relance cost either has ___ or it differs between ___
A bearing on the future, Alternatives
Are opportunity costs relevant
Yes
Are sunk costs relevant
No
The sections of a statement of clash flows are ___, ___, and ___
Operating, Investing, Financing
Any transaction that involves acquiring or disposing of LT Assets
Investing
Any transaction that involves obtaining cash from or repaying lenders or owners
Financing
Any transaction not categorized as financing or investing
Operating
Noncash items adjusted for in the operating section include ___, ___, and ___
Depreciation, Amortization, Gains/Losses
When adjusting for depreciation expense you must ___ to the statement of cash flows
Add it back
When adjusting for gains you must ___ to the statements of cash flows
Subtract it within
Decreases in A/R should be ___ in the statement
Added
Decreases in A/P should be __ in the statement
Subtracted
Identify the section of Cash Flow: Repurchased common stock
Financing
Identify the section of Cash Flow: Sell equipment
Investing (Cash), Operating (Gain/Loss)
Identify the section of Cash Flow: Accounts payable
Operating
Identify the section of Cash Flow: Loan money to an employee
Investing
Identify the section of Cash Flow: Pay dividend to shareholders
Financing
Identify the section of Cash Flow: Depreciation Expense
Operating
What do each of these measure: Gross Margin %
Profiablility
What do each of these measure: Earnings per share (EPS)
Market Performance
What do each of these measure: Working Captial
Liquidity
What do each of these measure: Current Ratio
Liquidity
What do each of these measure: Average days to collect
Asset Management
What do each of these measure: Average Sale period (days in inventory)
Asset Management
What do each of these measure: P/E ration
Market performance
What do each of these measure: DuPont Analysis
Profitability
Common size income statements show all items as a percentage of ___
Sales
The fraud triangle includes ___, ___, and ___
Opportunity, Pressure, Rationalization
What can company’s prevent the best in the fraud triangle
Opportunity
Internal controls generally include ___, ___, and ___
Segregation of Duties, Performance Evaluations, Required Absentees
Duties that should be done be different employees include ___, ___, and ___
Authorization, Custody, Recording
