Ch 4: connect Flashcards
Three activities vital to the role of managerial accounting are ______.
planning, controlling and decision making
the basic questions asked during the decision making process?
What should we be selling?
Who should we be serving?
How should we execute?
An internal control that deters the occurrence of undesirable events is a(n)
preventive
Large collections of information that are gathered from inside or outside a company to provide opportunities for ongoing reporting and analysis is referred to as
bid data
The essence of strategy are ______ ______ propositions
customer value
Undesirable events that have already happened are uncovered by ____ controls
detective
A type of indirect cost incurred to benefit more than one cost object is a(n) ______ cost.
common
Differential costs, opportunity costs and incremental costs are all cost classifications used in Blank______.
decision making
Period costs are always expensed on the income statement in the period in which Blank______.
they are incurrect
An income statement focusing on product and period costs has been prepared using a(n) _______format, while a(n)______ format income statement makes a distinction between fixed and variable costs.
traditional; contribution margin
Fixed costs that cannot easily be changed and often lock a company into a multi-year decision are called
indirect fixed costs
how to find cogs
beginning inventory + purchases- ending inventory
gross margin
sales - cogs
contribution margin
sales-variable expenses
what includes variable expenses
✦Cost of Goods Sold
✦ Variable Selling Costs
✦ Variable General and
✦Administrative Costs
“Rental income foregone on
factory space”
just opportunity cost
Advertising expense $250,000
per year
-fixed cost
- Period cost (selling)
Commissions paid to
salespersons ($30 per table
sold)
-variable cost
-period cost (selling)
Salary of Company President
$200,000 per year
-fixed cost
-product cost ( manufacturing overhead)
Depreciation of machines
used to produce tables
($10,000 per year)
-fixed cost
-product cost(manufacturing overhead)
-sunk cost
Cost of electricity to produce
tables ($2 per machine hour)
-variable cost
-product cost(manufacturing overhead)
Factory supervisor salary
$45,000 a year
-fixed cost
-product cost (manufacturing overhead)
Labor cost to assemble a table
($40/table)
-variable cost
-product cost (direct labor)
Wood used to make a table
($100 per table)
-variable cost
-product cost (direct labor)
