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accounting 202 > Final > Flashcards

Final Flashcards

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CPA flashcards
1
Q

Management accounting objectives

A

To provide information for decision making; and planning, controlling, evaluating and continuous improvement; for cost services, products, and other objects of interest to management

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2
Q

Who occupies a line position?

A

VP of marketing

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3
Q

Primary objective of management accounting

A

To provide management with information useful for planning and control of operations

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4
Q

Investigating production variances and adjusting the production process is an example of

A

Controlling

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5
Q

Example of non-manufacturing costs

A

Marketing and admin

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6
Q

Costs are divided into what two major functional categories?

A

Production and non-production

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7
Q

Examples of product costs

A

Direct materials, direct labor, OH
Are manufacturing costs
Are inventoriable costs

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8
Q

Product costs are expensed when

A

The product is sold

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9
Q

Example of fixed cost

A

Property taxes

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10
Q

Variable costs within the relevant range

A

Stay constant on a per unit basis as output changes
Increase in total as output increases
Decrease in total as output decreases

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11
Q

The high-low method…

A

Is not as accurate as other methods
Can be affected by the presence of outliers
Has the advantage of objectivity

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12
Q

The relevant range

A

Is the normal range of output
Is the range of output where cost relationships or behaviors are valid
May change from period to period

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13
Q

Formula for mixed cost

A

Total cost = total fixed cost + (variable rate x amount of output)

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14
Q

Using the high-low method, the variable rate of a mixed cost equals

A

(High point cost - low point cost)

/ (High point output - low point output)

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15
Q

Contribution margin is…

A

Difference between sales and variable costs

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16
Q

Equation for operating income

A

(Price x units sold) - (unit variable cost x units sold) - fixed cost

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17
Q

If actual sales = break even sales then…

A

Margin of safety equals 0

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18
Q

Sales mix is the relative combination of

A

Products sold by a firm

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19
Q

On a cost-volume-profit graph, the break even point is where

A

The revenue line intersects the total cost line

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20
Q

A “what-if” technique that examines the impact of changes in underlying assumptions on an answer is:

A

Sensitivity analysis

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21
Q

If fixed costs increase, the break even point in units will…

A

Increase

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22
Q

Margin of safety in dollars is:

A

Expected sales minus sales at break even

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23
Q

Difference between financial and managerial accounting

A

Financial: external users, objective, according to GAAP, fixed intervals

Managerial: management users, obj./sub., according to management needs, prepared at fixed intervals and on as-needed basis

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24
Q

Product or non-product costs?
Manufacturing OH
non-manufacturing costs

A

Product

Non- product

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25
Q

Difference between direct and indirect costs?

A

Direct - identified w/and can be traced to a cost object

Indirect - can’t be identified or traced to a cost object

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26
Q

Difference between product and period costs

A

Product: manufacturing costs - DM, DL, and OH

Period: non-manufacturing costs - selling and admin. exp.

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27
Q

COGM statement

A 
WIP
DM
DL
FOH
total man. Fact. Costs incurred
Total man. Fact. Costs
Less WIP 
COGM
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28
Q

Calculate predetermined OH rate

A

OH/DL cost

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29
Q

Applied overhead =

A

Predetermined OH x actual activity level

30
Q

Provides product costs for each quantity of product that is manufactured

A

Job order cost system

31
Q

Underapplied FOH has a debit or credit balance?

A

Debit

32
Q

Manner in which a cost changes as a related activity changes

A

Cost behavior

33
Q

Examples of mixed costs

A

Quality control dept. salaries
Purchasing dept. salaries
Maintenance expenses
Warehouse expenses

34
Q

Examination of the relationships among selling prices, sales and production volume, costs, exp., and profits

A

Cost-volume profit analysis

35
Q

Contribution format income statement

A 
Sales 
Less: variable exp. 
          Manufacturing 
          Selling 
          Admin. 
Contribution margin 
Less: fixed exp. 
          Manufacturing 
          Selling
          Admin. 
Net income
36
Q

Cost-volume profit is also called

A

Break-even

37
Q

Break even formula (dollars)

A

Fixed cost/ CM ratio

38
Q

Integrated set of operating and financial budgets for a period of time

A

Master budget

39
Q

Calculate sales budget

A

Budgeted revenue = expected sales volume x expected unit sales price

40
Q

Production budget

A

Expected units to be sold
Plus desired units in ending inventory
Less estimated units in beginning inventory
Total units to be produced

41
Q

DM Purchase budget

A

Budgeted DM required for production = budgeted production volume x DM qty expected per unit

Materials required for production(step1)
Plus desired ending materials inventory
Less estimated beginning materials inventory
Direct material quantity to be purchased

Budgeted DM to be purchased = DM qty to be purch. X unit price(step2)

42
Q

DL cost budget

A

Budgeted DL hours required for production = budgeted production volume x DL hours expected per unit

DL cost = DL required for production(step1) x hourly rate

43
Q

Factory OH cost budget

A

Add everything together

44
Q

Estimates the expected receipts and payment of cash for a period of time

A

Cash budget

45
Q

Calculate standard costs

A

Standard price x standard qty per unit = standard cost per unit

46
Q

In a favorable cost variance the actual cost is greater or lesser than the standard cost at actual volume?

A

Lesser

47
Q

Calculate - Materials price and usage (quantity) variance

A

Actual material used - standard material used = $ x standard price = $

48
Q

In a favorable cost variance the actual cost is greater or lesser than the standard cost at actual volume?

A

Lesser

49
Q

Calculate - Materials price and usage (quantity) variance

A

Actual material used - standard material used = $ x standard price = $

50
Q

Calculate DM quantity variance

A

=(A qty - Std qty) x Std price

51
Q

Calculate DL rate variance

A

= (A rate/hr. - Std rate/hr.) x A hrs.

52
Q

Calculate DL time variance

A

= (A DL hrs - Std DL hrs) Std rate/hr

53
Q

Price and rate are actual or standard?

A

Actual

54
Q

Quantity and time are actual or standard?

A

Standard

55
Q

Concerning hurdle rate, a positive number means…

A

We made hurdle rate

56
Q

Define sunk costs

A

Costs that have been incurred in past, cannot be recouped, and are not relevant to future decisions

57
Q

Define differential cost

A

Amount of increase or decrease in cost that is expected from a course of action as compared to an alternative

58
Q

Define opportunity cost

A

Revenue that is forgone from an alternative use of an asset such as cash

59
Q

Define sunk costs

A

Costs that have been incurred in past, cannot be recouped, and are not relevant to future decisions

60
Q

Concerning hurdle rate, a positive number means…

A

We made hurdle rate

61
Q

Quantity and time are actual or standard?

A

Standard

62
Q

Price and rate are actual or standard?

A

Actual

63
Q

Calculate DL time variance

A

= (A DL hrs - Std DL hrs) Std rate/hr

64
Q

Calculate DL rate variance

A

= (A rate/hr. - Std rate/hr.) x A hrs.

65
Q

Calculate DM quantity variance

A

=(A qty - Std qty) x Std price

66
Q

Calculate - Materials price and usage (quantity) variance

A

Actual material used - standard material used = $ x standard price = $

67
Q

Define opportunity cost

A

Revenue that is forgone from an alternative use of an asset such as cash

68
Q

Operating activity examples

A 
Purchase inventory 
Pay employees 
Pay taxes 
From sale of products 
From providing services
69
Q

Investing activity examples

A

From sale of property, plant, and equipment
From sale of investments
To buy property, plant, equip.
To purchase investments

70
Q

Financing activity examples

A

From issuing long term liabilities
From issuing stock
To pay dividends to shareholders
To repurchase common stock(treasury stock)

71
Q

Net cash flow =

A

Ending balance - beginning balance

accounting 202 (1 decks)

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