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Accounting > Final > Flashcards

Final Flashcards

1
Q

Direct materials used(Raw Materials Inventory)=

A 
Beginning raw materials inventory
\+Purchases
=Materials available for use
-Ending raw materials inventory
=Direct Materials Used
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2
Q

Cost of Goods Sold=

A 
Beginning Inventory
\+Purchases
=Cost of Goods Available for Sale
-Ending Inventory
=Cost of Goods sold
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3
Q

Work In Process Inventory=

A

Beginning WIP
+Total Manufacturing Costs(DM+DL+MOH)
-Ending WIP
=Cost of goods manufactured

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4
Q

Total Current Assets=

A

Cash
+Accounts Payable
+Total Inventory
+Prepaid Expenses

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5
Q

Purchases include

A

Import duties, freight in, and items purchased

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6
Q

Operating Income=

A 
Sales
-Cost of Goods Sold
=Gross Profit
-Operating Expenses
=Operating Income
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7
Q

Gross Profit=

A

Sales
-Cost of Goods Sold
=Gross Profit

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8
Q

Variable costs change in ______ proportion to volume

A

Direct

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9
Q

Fixed costs stay the same, but are PER UNIT change ______ to volume

A

Inversely

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10
Q

Total mixed costs ______ as volume increases

A

Increase

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11
Q

Mixed costs PER UNIT ______ as volume increases

A

Decrease

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12
Q

Relevant range is when Total fixed costs and variable costs per unit ______

A

Stay the same

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13
Q

High Low method step 1

A

Find the highest and lowest volume points and calculate slope

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14
Q

High Low method step 2

A

Find the fixed cost component by using the slope and data from either high/low points.
y=vx+f

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15
Q

High Low method step 3

A

Using the variable cost per unit from step 1 and the fixed cost from step 2 write an equation
y=8x+8000

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16
Q

Variable manufacturing costs include

A

Direct labor, Direct materials, variable MOH

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17
Q

Fixed MOH costs include

A

taxes, insurance on the plant, straight line depreciation, lease payments

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18
Q

Absorption costing includes _________,_______,_______,_______, where as variable costing does not include _______.

A

DM, DL, Variable MOH, Fixed MOH,

Fixed MOH

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19
Q

Contribution Margin =

A

Sales revenue

-variable expenses

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20
Q

Operating income=

A 
Sales
-Variable expenses
=Contribution Margin
-Fixed expenses
=Operating Income
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21
Q

Contribution margin ratio=

A

Unit contribution margin/sales price per unit

or
contribution margin/sales revenue

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22
Q

Contribution margin per unit=

A

Sales price per unit
-Variable cost per unit
=CM per unit

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23
Q

To find sales in units=

A

(Fixed expenses+Operating income)/CM per unit

24
Q

To find sales in dollars=

A

(fixed expenses+operating income)/CM ratio

25
Q

Operating leverage factor=

A

CM/Operating income

26
Q

Margin of safety=

A

Expected sales

-Breakeven sales

27
Q

Target Total Costs=

A

Revenue at market price
-Desired profit
=Target Total Cost

28
Q

Strategic planning is _____ term goals

A

long

29
Q

What is the master budget?

A

The comprehensive planning document for the entire organization

30
Q

Units to Produce=

Production Budget

A 
Units needed for sales
\+Desired ending inventory
=Total units needed
-Units in beginning inventory
=Units to produce
31
Q

safety stock

A

Inventory kept on hand incase demand is higher

Also considered desired ending inventory

32
Q

Quantity of DM to purchase=

DM budget

A 
Quantity of DM needed for production
\+Desired DM ending inventory
=Total quantity of DM needed
-DM beginning inventory
=Quantity of DM to purchase
33
Q

Total Direct Labor Cost=

DL budget

A 
Units to be produced
*DL hours perunit
=Total DL hours required
*DL cost per hour
=total DL cost
34
Q

Net Income=

A 
Sales Revenue
-COGS
=Gross Profit
-Operating Expenses
=Operating Income
-Interest Expense
-Income Tax expense
=Net Income
35
Q

Flexible budgets

A

Budgets prepared for different volumes of activity

36
Q

Return on Investment=

ROT

A

Operating income / Total assets

37
Q

Sales margin=

SOS

A

Operating income / sales

38
Q

Capital Turnover=

CST

A

Sales / total assets

39
Q

Residual Income=

RIOTT

A

operating income - (target rate of return * total assets)

40
Q

Master budget variance=

A

actual revenues/expenses and the master budget

41
Q

Flexible budget variance=

A

flexible budget

-actual results

42
Q

Return on investment

A

measures the amount of income an investment center earns relative to the size of it’s assets

43
Q

Residual income

A

determines whether the division has created any excess income above and beyond expectations

44
Q

sales margin

A

focuses on profitability by showing how much operating income the division earns on every $1.

45
Q

Capital turnover

A

focuses on how efficiently the division uses its assets to generate sales revenue

46
Q

Flexible budget

A

budgets based on the actual activity of a period

47
Q

sales volume variance is

A

units actually sold

-number of unites expected to be sold according to the static or original budget

48
Q

Direct Materials Quantity Variance=

A

Standard Price * (Std Quant Allowed - Actual Quantity Used)

49
Q

Direct Labor Efficiency Variance=

A

Standard rate * (Standard Hours Allowed - Actual Hours)

50
Q

Direct Labor Rate Variance=

A

Actual hours * (Standard rate - actual rate)

51
Q

Direct Material Price Variance=

A

Actual Quantity Purchased * (Standard price- actual price)

52
Q

Payback Period=

A

Amount invested / expected annual net cash inflow

53
Q

Accounting Rate of Return=

A

Average annual operating income from asset / initial investment

or

(Average annual net cash flow - depreciation expense) / initial investment

54
Q

Annual depreciation expense=

A

(Initial cost of asset - residual value) / useful life of asset

55
Q

Factors affecting the time value of money:

A

Principal, number of periods, interest rate

Accounting (4 decks)

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