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Acct 2101 > Midterm > Flashcards

Midterm Flashcards

1
Q

ABC

A

method of allocating overhead based on each product’s use of activities in making the product using cost drivers

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2
Q

Balanced Scorecard

A

performance-measurement approach to evaluate a company’s operations

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3
Q

Controller

A

financial officer responsible for a company’s accounting records, internal control, fin statements and TR’s

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4
Q

COGM

A

(total cost of WIP) - (Ending WIP inventory)

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5
Q

Direct Labor

A

work directly related to converting raw materials to finished goods

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6
Q

Enterprise Resource Planning

A

comprehensive software to manage all business processes

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7
Q

JIT Inventory

A

goods are manufactured or purchased just in time for sale

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8
Q

Line Positions

A

jobs directly involved in primary revenue-generating operating activities

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9
Q

Manufacturing Overhead

A

costs indirectly associated with the manufacture of the finished product

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10
Q

Period Costs

A

matched with revenue of specific time period and charged to expense as incurred

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11
Q

SOX Act

A

intended to reduce unethical corporate behavior

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12
Q

Staff Positions

A

jobs that support effort of line employees

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13
Q

Total Cost of WIP

A

beginning WIP + total manufacturing costs of current period

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14
Q

Total Manufacturing Costs

A

direct materials, direct labor, manufacturing overhead incurred in period

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15
Q

Triple Bottom Line

A

evaluation of company’s social responsibility

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16
Q

WIP Inventory

A

partially completed manufactured units

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17
Q

Cost Accounting

A

measuring, recording, and reporting product/service costs

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18
Q

Job Cost Sheet

A

used to record the costs chargeable to specific job and determine total/unit costs of the completed job

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19
Q

Job Order Cost System

A

system where costs are are assigned to each job or batch

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20
Q

Overapplied Overhead

A

overhead applied to WIP is greater than overhead incurred

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21
Q

Predetermined Overhead Rate

A

rate based on relationship between estimated annual overhead and estimated annual operating activity, expressed by common base

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22
Q

Process Cost System

A

used when company manufactures large amount of similar products

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23
Q

Activity Cost Pool

A

overhead cost attributed to distinct type of activity

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24
Q

Batch-Level Activities

A

performed for each batch of products rather than each unit

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25
Q

Cost Driver

A

factor or activity that has a direct cause/effect relationship with resources consumed

26
Q

Facility-Level Activities

A

required to support entire production process

27
Q

Non-Value-Added Activity

A

if eliminated, would not reduce perceived value of product

28
Q

Product-Level Activities

A

support of an entire product line but not for every unit or batch

29
Q

Unit-Level Activities

A

performed for each unit of production

30
Q

Activity Index

A

activity that causes changes in the behavior of costs

31
Q

Break-Even Point

A

total revenue = total costs

32
Q

CM

A

revenue - variable costs

33
Q

CM Ratio

A

% of each dollar sales available to apply to fixed costs and contribute to net income; CM/Selling Price

34
Q

CVP Analysis

A

effects on changes in costs and volume on profits

35
Q

CVP Income Statement

A

for internal use (not GAAP) classifies costs as F or V, reports CM in body of statement

36
Q

High-Low Method

A

uses total costs incurred at high and low levels of activity to classify mixed costs into fixed and variable components

37
Q

Margin of Safety

A

difference between actual/expected sales and sales at break-even point

38
Q

Mixed Costs

A

contain both a variable and fixed element; do not change proportionately with activity level

39
Q

Regression Analysis

A

estimates cost equation by employing information from all data; minimizes sum of squared distances from the line to the data points

40
Q

Relevant Range

A

range of activity index over which the company expects to operate during the year

41
Q

Target Net Income

A

objective set by management

42
Q

Unit CM

A

revenue - VC

43
Q

Absorption Costing

A

all manufacturing costs are charged to the product

44
Q

Cost Structure

A

proportion of fixed versus variable costs that a company incurs

45
Q

Degree of Operating Leverage

A

measure of extent to which a company’s net income reacts to a change in sales; CM/NI

46
Q

Theory of Constraints

A

used to identify and manage constraints in order to achieve goals

47
Q

Variable Costing

A

only variable manufacturing costs are product costs, and fixed manufacturing costs are period costs

48
Q

Participative budgeting

A

each level of management participates

49
Q

Budgetary slack

A

when managers intentionally underestimate revenues or overestimate expenses to achieve goals easier.

50
Q

Long-range planning is usually at least __ years.

A

5

51
Q

Master budget contains what two classes of budgets?

A

Operating and financial

52
Q

Operating budget

A

result in preparation of budgeted income statement. Sales and Production

53
Q

Financial budget

A

cash resources; capital expenditure budget, cash budget, budgeted balance sheet

54
Q

Sales budget

A

prepared first, from sales forecast

55
Q

Production budget

A

number of units to produce to meet sales demand

56
Q

Direct materials budget

A

quantity and cost of direct materials to be purchased

57
Q

Direct labor budget

A

quantity (hours) and cost of labor to meet production requirements

58
Q

Manufacturing overhead budget

A

distinguished between variable and fixed costs, per labor hours

59
Q

Selling & Admin expense budget

A

combines operating expenses. Variable separate from fixed

60
Q

Budgeted Income Statement

A

end-product. Expected profitability for time period.

61
Q

Cash budget

A

anticipated cash flows (receipts, disbursements, and financing)

62
Q

Budgeted balance sheet

A

Assets and Liabilities

Acct 2101 (2 decks)

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