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Exam 1 > Managerial Accounting Acct 2210 > Flashcards

Managerial Accounting Acct 2210 Flashcards

1
Q

Long term, can be significantly reduced in the short term

A

Committed

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2
Q

May be altered in the short term by current managerial decisions

A

Discretionary

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3
Q

A cost that remains constant regardless of changes in the level of the activity

A

Fixed Cost

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4
Q

A straight line closely approximates a curvilinear variable cost line within the relevant range

A

Linearity Assumption

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5
Q

Range of activity for a fixed cost is the range of activity over which the graph of the cost is flat

A

Relevant Range

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6
Q 
Which of the following cost would be variable with respect to the number of cones sold at a Baskin & Robbins Shop?
A. Cost of Lighting
B. Wages of the store manager
C. Cost of ice cream
D. Cost of napkins for customers
A

C. Cost of ice cream

D. Cost of napkins for customers

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7
Q

Contains both variable and fixed elements

A

Mixed Cost

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8
Q

Y=a+bX

A

Mixed Cost Equation

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9
Q

Total mixed cost

A

Y

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10
Q

Total fixed cost

A

A

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11
Q

Variable cost per unit of activity

A

B

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12
Q

Level of activity

A

X

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13
Q

To analyze mixed cost, first identify period with lowest activity and period with the highest activity level.
Change in cost/Change in activity
High-Low

A

High - Low Method

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14
Q

Change in cost/Change in activity

A

Variable Cost

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15
Q

A method used to analyze mixed costs if a scatter graph plot reveals an approximately linear relationship between the X and Y variable.

A

Least - Squares Regression Method

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16
Q

Sales-Cost of Good Sold

A

Gross Margin

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17
Q

Gross Margin-Selling-Administrative Cost

A

Net Operating Income

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18
Q

The potential benefit that is given up when one alternative is selected over another

A

Opportunity Cost

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19
Q

Cost that have already been incurred and cannot be changed now or in the future. These costs should be ignored when making decisions.

A

Sunk Cost

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20
Q

The revenue that can be obtained from selling one more unit of product is called

A

Marginal Revenue

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21
Q

Suppose you are trying to decide whether to drive or take the train to Portland to attend a concert. You have ample cash to do either, but you don’t want to waste money needlessly. Is the cost of the train ticket relevant in this decision? In other words, should the cost of the train ticket affect the decision of whether you drive or take the train to Portland?

A

A. Yes, the cost of the train ticket is relevant.

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22
Q

Suppose you are trying to decide whether to drive or take the train to Portland to attend a concert. You have ample cash to do either, but you don’t want to waste money needlessly. Is the annual cost of licensing your car relevant in this decision?

A

B. No, the licensing cost is not relevant.

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23
Q

Suppose that your car could be sold now for $5,000. Is this a sunk cost?

A

B. No, it is not a sunk cost.

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24
Q

Charge direct material and direct labor costs to each jab as work is performed

A

Direct Cost

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25
Q

Manufacturing Overhead, including indirect materials and indirect labor, are allocated to all jobs rather than directly traced to each job

A

Indirect Cost

26
Q

What base is used to direct labor hours, direct labor dollars, or machine hours, and is assigned to manufacturing overhead for individual jobs.
Cost Driver that causes overhead

A

Allocation Base

27
Q 
Estimated total manufacturing
overhead cost for the coming period
------------------------------------
Estimated total units in the
allocation base for the coming period
A

Predetermined Overhead Rate(POHR)

28
Q

Used to apply overhead to jobs is determined before the period begins

A

POHR

29
Q

POHR for manufacturing Overhead

A

Y=a+bX
Y = The estimated total manufacturing overhead cost
a = The estimated total fixed manufacturing overhead cost
b = The estimated variable manufacturing overhead cost
per unit of the allocation base
X = The estimated total amount of the allocation base.

30
Q

Job WR53 at NW Fab, Inc. required $200 of direct materials and 10 direct labor hours at $15 per hour. Estimated total overhead for the year was $760,000 and estimated direct labor hours were 20,000. What would be recorded as the cost of job WR53?

A

POHR= $760,000/20,000 hr. $38
Direct Materials $200
Direct Labor $15(10 hrs)= $150
MOHD. $38(10hrs)= $380
Total Cost $730

31
Q

any materials that go into the final product.

A

Raw Material

32
Q

consists of units of production that are only partially complete and will require further work before they are ready for sale to customers.

A

Work in Process

33
Q

consist of completed units of product that have not been sold to customers.

A

Finished Goods

34
Q

include the manufacturing costs associated with the goods that were finished during the period,

A

Cost of goods manufactured

35
Q

are not assigned to individual jobs, rather they are expensed in the period incurred.

A

Non manufacturing Cost

36
Q

Beginning work in process was $125,000. Manufacturing costs added to production for the month were $835,000. There were $200,000 of partially finished goods remaining in work in process inventory at the end of the month. What was the cost of goods manufactured during the month?

A

$760,000

37
Q

Beginning finished goods inventory was $130,000. The cost of goods manufactured for the month was $760,000. And the ending finished goods inventory was $150,000. What was the cost of goods sold for the month?

A

$740,000

38
Q

exists when the amount of overhead applied to jobs during the period using the predetermined overhead rate is less than the total amount of overhead actually incurred during the period.

A

Underapplied Overhead

39
Q

exists when the amount of overhead applied to jobs during the period using the predetermined overhead rate is greater than the total amount of overhead actually incurred during the period.

A

Overapplied Overhead

40
Q

Tiger, Inc. had actual manufacturing overhead costs of $1,210,000 and a predetermined overhead rate of $4.00 per machine hour. Tiger, Inc. worked 290,000 machine hours during the period. Tiger’s manufacturing overhead is:

A

$50,000 underapplied

41
Q

What effect will the overapplied overhead have on PearCo’s net operating income?

a. Net operating income will increase.
b. Net operating income will be unaffected.
c. Net operating income will decrease.

A

a. Net operating income will increase.

42
Q

•Costs that can be
easily and conveniently traced to a unit of product or other cost object.
•Examples: direct material and direct labor

A

Direct Cost

43
Q
  • Costs that cannot be easily and conveniently traced to a unit of product or other cost object.
  • Example: manufacturing overhead
A

Indirect Cost

44
Q

Indirect costs incurred to support a number of cost objects. These costs cannot be traced to any individual cost object.

A

Common Cost

45
Q

Raw materials that become an integral part of the product and that can be conveniently traced directly to it.

A

Direct Materials

46
Q

Those labor costs that can be easily traced to individual units of product.

A

Direct Labor

47
Q

Manufacturing costs that cannot be easily traced directly to specific units produced.

A

Manufacturing Overhead

48
Q

Materials used to support the production process.

A

Indirect materials

49
Q

Wages paid to employees who are not directly involved in production work.

A

Indirect Labor

50
Q

Costs necessary to secure the order and deliver the product. Selling costs can be either direct or indirect costs.

A

Selling Costs

51
Q

All executive, organizational, and clerical costs. Administrative costs can be either direct or indirect costs.

A

Administrative Costs

52
Q

Selling Costs and Administrative Costs

A

Non manufacturing Costs

53
Q

include direct materials, direct labor, and manufacturing overhead.

A

Product Costs

54
Q

include all selling costs and administrative costs.

A

Period Costs

55
Q

Which of the following costs would be considered a period rather than a product cost in a manufacturing company?
A. Manufacturing equipment depreciation.
B. Property taxes on corporate headquarters.
C. Direct materials costs.
D. Electrical costs to light the production
facility.
E. Sales commissions.

A

B. Property taxes on corporate headquarters

E. Sales Commissions

56
Q

A cost that varies, in total, in direct proportion to changes in the level of activity.

A

Variable costs

57
Q

Direct Materials and Direct Labor

A

Prime Cost

58
Q

Direct Labor and Manufacturing Overhead

A

Conversion costs

59
Q

Is used when a single product is produced on a continuing basis or for a long period of time. Job-order costing is used when many different jobs having different production requirements are worked on each period.
Systems accumulate costs by department. Job-order costing systems accumulated costs by individual jobs.

A

Process Costing

60
Q 
Process costing is used for products that are:
a. Different and produced continuously.
b. Similar and produced continuously.
c. Individual units produced to customer
specifications.
d. Purchased from vendors.
A

b. Similar and produced continuously.

Exam 1 (3 decks)

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