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ACCT II > Unit 1 and 2 > Flashcards

Unit 1 and 2 Flashcards

1
Q

Prime costs

A

direct material + direct labor

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2
Q

Conversion costs

A

direct labor + o/h

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3
Q

non-manufacturing costs

A

selling
admin
both direct/indirect

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4
Q

product cost

A

recorded on [BS], attached to unit as it is purchased/manu + stay attached until sale [income st]

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5
Q

period costs

A

selling and admin costs [IS]

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6
Q

activity base/cost driver

A

measure o what causes the incurrence o variable cost

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7
Q

committed v discretionary fixed costs

A
  1. X be adjusted in ST

2. can be altered in ST

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8
Q

Differential costs and revenues

A

those that change between alternative plans

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9
Q

Contribution format used by

A

management

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10
Q

contribution format

A

sales - VC = CM - FC = NI

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11
Q

5 qualities of job order costing

A 
diff products e period
manufactured to order
costs traced/allocated to jobs
cost records f each distinct product/job
o/h est + allocated @ predetermined rate
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12
Q

3 qualities of process costs

A

single product f long periods
costs accumulated in dep
unit product cost = total cost/units

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13
Q

predetermined overhead rate eq

A

est total manu o/h cost for next period/est total units in allocation base

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14
Q

overhead applied eq

A

predetermined rate x actual activity

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15
Q

single v multiple predetermined o/h bases

A
  1. factory wide 2. dep
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16
Q

absorption costing

A

inclusion o all manu costs (DM, DL, M O/H) in cost o product

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17
Q

normal costing

A

application o o/h using predetermined o/h rate x actual # o allocation base incurred by job

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18
Q

WIP inventory incl

A

raw mat inventory, direct labor, manu o/h

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19
Q

(job order) [is] incl

A

COGS and period cost/selling+admin exp

20
Q

end o year inventory eq

A

raw material beginning + purchased = available - end of year = used

21
Q

cost of goods manufactured eq

A

WIP beginning + manu costs = WIP this period - WIP end = COG manu

22
Q

manu costs

A

DM + DL + manu O/H

23
Q

COGS eq

A

fin goods beginning + COG manu this period = COG avail - fin goods end = COGS

24
Q

over/underapplied o/h closed to

A

COGS

25
Q

underapplied/overapplied

A

under applied = o/h applied less than amount actual, added to COGS

26
Q

break even

A 
NI = 0
CM = FC
27
Q

CM ratio eq (2)

A

total CM/total sales

unit CM/ unit selling price

28
Q

Break even analysis (3, but 2, lets be honest)

A

sales = VC + FC
CM method:
units sold = FC/unit CM
total sales$ = FC/CM ratio

29
Q

BE point eq (considering target profit)

A

(FC + profit)/ unit CM

30
Q

margin o safety

A

Amount that current sales can decrease before losses occur

31
Q

operating leverage

A

Measures the sensitivity of net operating income to percentage change in sales

32
Q

degrees of operating leverage

A

CM/net operating income

33
Q

sales mix

A

Relative proportions in which a company’s products are sold

34
Q

Multip product BE analysis assumptions (4)

A

sales $ constant
costs - linear
sales mix - constant
inventories X change

35
Q

Responsibility accounting def

A
  • Managers should only be accountable for those items they can actually control to a significant extent
36
Q

participative budget systems

A

info down and up

37
Q

activity variances

A

differences between planning budget and flexible budget

38
Q

spending variances

A

diff between flexible budget and actual cost

39
Q

standard costs (4 qualities)

A

predetermined
used f planning
benchmarks f measuring perf
simplifiy acct sys

40
Q

management by exception

A

focus on Q and costs that exceed standards

41
Q

total quality management

A

concept o 0 defects/waste

42
Q

price variance

A

AQpurch x AP

- (AQpurch x SP)

43
Q

quantity variance

A

AQused x SP

- SQ x SP

44
Q

total labor variance =

A

rate variance + efficiency variance

45
Q

labor rate variance

A

(AH x AP)

AH x SP

46
Q

labor efficiency variance

A

AH x SP

SH x SP

ACCT II (4 decks)

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