B4

Question 1

what goes into COGM budget?

Answer 1

DM,DL,FOH,Beg WIP-EndiWIP unit production

Question 2

sales in units to achieve a target profit

Answer 2

fixed cost+pretax profit/CM in units

Question 3

how is pretax profit calculated

Answer 3

aftertax profit/ 1-tax rate

Question 4

how is absorbtion costing differnt from variable costing?

Answer 4

variable expenses fixed overhead as a period cost

absorption includes fixed overhead as a product cost

Question 5

when production is more than sales which method produces a greater income?

Answer 5

absorption because less cost is expensed, there is more in ending inventory

Question 6

what is the y intercept?

Answer 6

its where x is zero and y has a value on vertical y axis

Question 7

what is residual income

Answer 7

income in excess of a fixed return on invested funds

Question 8

what does a CM of 20% mean? and how is selling price calculated?

Answer 8

variable costs are 80% of sales
variable costs/1-CM ratio
or 15/.80

Question 9

what is the breakeven point in units?

Answer 9

fixed costs/contribution margin in units

Question 10

how is flexible budget calced?

Answer 10

use actual units to plug into budgeted formula