# BEC- Financial Planning Flashcards Preview

## CPA Courses > BEC- Financial Planning > Flashcards

Flashcards in BEC- Financial Planning Deck (19)
2
Q

BEC

What is a Static Budget?

A

Budget targeted for a specific segment of a company.

3
Q

BEC

What is a Maser Budget?

A

Budget targeted for the company as a whole

Includes budgets for Operations and Cash Flows

Includes set of budgeted Financial Statements

4
Q

BEC

How do Fixed Costs affect budgeting?

A

Costs independent of the level activity within the relevant range

Property Tax is the same whether you produce 100,000 units or zero units

However – Fixed Costs per unit vary given the amount of activity

If you produce fewer units, fixed costs per unit will be greater than if you produce more units – i.e. less units to spread the cost over

5
Q

BEC

How do Variable Costs affect budgeting?

A

The more Direct Materials or Direct Labor used, the more Variable Costs per unit

However – Variable Costs per unit don’t change with the level of activity like Fixed Costs per unit

6
Q

BEC

How are Material Variances calculated?

A

SAM:

Standard Material Costs
- Actual Material Costs
= Material Variance

7
Q

BEC

How are Labor Variances calculated?

A

SAL

Standard Labor Costs
- Actual Labor Costs
= Labor Variance

8
Q

BEC

A

OAT

9
Q

BEC

How does Absorption Costing compare to Variable Costing?

A

Absorption Costing - External Use, Cost of Sales, Gross Profit, SG&A

Variable Costing - Internal Use, Variable Costs, Contribution Margin, Fixed Costs

10
Q

BEC

How is Contribution Margin calculated?

A

Sales Price (per unit)
- Variable Cost (per unit)
= Contribution Margin (per unit)

11
Q

BEC

How is Breakeven Point (per unit) calculated?

A

Total Fixed Costs / Contribution Margin (per unit)
= Breakeven Point Per Unit

Assumption: Total Costs & Total Revenues are LINEAR

12
Q

BEC

What is the focus in a Cost Center?

A

Management is concerned only with costs

13
Q

BEC

What is the focus in a Profit Center?

A

Management is concerned with both costs and profits

14
Q

BEC

What is the focus in an Investment Center?

A

Management is concerned with costs, profits, and assets

15
Q

BEC

What is the Delphi technique?

A

Forecasting technique where Data is collected and analyzed

Requires judgement/consensus

16
Q

BEC

What is Regression Analysis?

A

A forecasting technique where Sales is the dependent variable.

Simple Regression - One independent variable

Multiple Regression - Multiple independent variables

17
Q

BEC

What are Econometric Models?

A

Forecast sales using Economic Data

18
Q

BEC

What are Naive Forecasting Models?

A

Very Simplistic

“Eyeball” past trends and make an estimate

19
Q

BEC

How does a Moving Average compare to Exponential Smoothing?

A

Both project estimates using average trends from recent periods

Difference: Exponential Smoothing weighs recent data more heavily

20
Q

BEC

What are the characteristics of Short-term Cost Analysis?

A

Uses Relevant Costs Only

Ignore Sunk Costs

Opportunity Cost is a Must