Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Managerial Accounting > Exam 1 (Chapters 1 & 2) > Flashcards

Exam 1 (Chapters 1 & 2) Flashcards

1
Q

This accounting is concerned with providing information to managers for use within the organization.

A

Managerial Accounting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

This accounting is concerned with reporting financial information to external parties, such as stockholders, creditors, and regulators.

A

Financial Accounting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

___________ is a part or activity of an organization about which managers would like cost, revenue, or profit data. Examples of business segments include product lines, customer groups (segmented by age, ethnicity, gender, volume of purchases, etc.), geographic territories, divisions, plants, and departments.

A

Segment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

_______ involves establishing goals and specifying how to achieve them.

A

Planning

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

________ helps managers perform three vital activities—planning, controlling, and decision making.

A

Managerial Accounting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

_______ is a detailed plan for the future that is usually expressed in formal quantitative terms

A

Budget

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

_________ compares budgeted data to actual data in an effort to identify and learn from excellent performance and to identify and eliminate sources of unsatisfactory performance. Performance reports can also be used as one of many inputs to help evaluate and reward employees.

A

Performance Report

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

_______ is a “game plan” that enables a company to attract customers by distinguishing itself from competitors

A

Strategy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

This accounting is concerned with reporting financial information to external parties, such as stockholders, creditors, and regulators.

A

Financial Accounting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

This accounting is concerned with providing information to managers within an organization so that they can formulate plans, control operations, and make decisions.

A

Managerial Accounting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What are the purposes of cost classification?

A
  1. Assigning costs to cost objects
  2. Accounting for costs in manufacturing companies
  3. Preparing financial statements
  4. Predicting cost behavior in response to changes in activity
  5. Making decisions
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Costs that can beeasily and conveniently traced to a unit of product or other cost object.

A

Direct Cost

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Costs that cannot be easily and conveniently traced to a unit of product or other cost object.

A

Indirect Cost

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Indirect costs incurred to support a number of cost objects. These costs cannot be traced to any individual cost object.

A

Common Cost

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Give examples of Direct Cost

A

Direct Material & Direct Labor

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Give an example of an Indirect Cost

A

Manufacturing Overhead

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What are the classifications of manufacturing Costs

A
  • Direct Materials
  • Direct Labor
  • Manufacturing Overhead
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

_______ are raw materials that become an integral part of the product and that can be conveniently traced directly to it.

A

Direct Materials

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Given an example of Direct Materials

A

A radio installed in an automobile

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

___________ are those labor costs that can be easily traced to individual units of product

A

Direct Labor Cost

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Give an example of a Direct Labor Cost

A

Wages paid to automobile assembly workers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

__________ includes all manufacturing costs except direct material and direct labor. These costs cannot be readily traced to finished products.

A

Manufacturing Overhead

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Manufacturing Overheard includes _________ & _________ that cannot be easily or conveniently traced to specific units of product

A

Indirect Materials & Indirect Labor costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Give examples of Manufacturing Overhead

A
  • Depreciation of manufacturing equipment
  • Utility costs
  • Property taxes
  • Insurance premiums incurred to operate a manufacturing facility
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Prime Cost =

A

Direct Material + Direct Labor

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Conversion Cost =

A

Direct Labor + Manufacturing Overhead

27
Q

_________ all executive, organizational, and clerical costs. Administrative costs can be either direct or indirect costs.

A

Administrative Cost

28
Q

________ Costs necessary to secure the order and deliver the product. Selling costs can be either direct or indirect costs.

A

Selling Cost

29
Q

What makes up non manufacturing Costs

A

Selling Costs & Administrative Costs

30
Q

__________includes all the costs that are involved in acquiring or making a product.

A

Product Costs

31
Q

Which costs “attach” to a unit of product as it is purchased or manufactured and they stay attached to each unit of product as long as it remains in inventory awaiting sale.

A

Product Costs

32
Q

For manufacturing companies, product costs

include:

A

Raw Materials, Work in Process, and Finished Goods Costs

33
Q

_______ includes any materials that go into the final product.

A

Raw Materials

34
Q

________ consists of units of product that are only partially complete and will require further work before they are ready for sale to the customer.

A

Work in Process

35
Q

__________ consists of completed units of product that have not yet been sold to customers.

A

Finished Goods Costs

36
Q

_______ include direct materials, direct labor, and manufacturing overhead.

A

Product Costs

37
Q

________ include all selling costs and administrative costs.

A

Period Costs

38
Q

________ refers to how a cost will react to changes in the level of activity.

A

Cost behavior

39
Q

What are the classifications of cost behavior

A

Variable costs, fixed costs, and mixed costs

40
Q

A cost that varies, in total, in direct proportion to changes in the level of activity.

A

Variable Costs

41
Q

A variable cost per unit is _________

A

constant

42
Q

A measure of what causes the incurrence of a variable cost?

A
  • Units produced
  • Machine hours
  • Miles Driven
  • Labor hours
43
Q

A cost that remains constant, in total, regardless of changes in the level of the activity.

A

Fixed Costs

44
Q

If expressed on a ____ _____ ______, the average fixed cost per unit varies inversely with changes in activity.

A

per unit basis

45
Q

What are the two types of fixed costs?

A

Committed and Discretionary

46
Q

This type of fixed cost is long-term, cannot be significantly reduced in the short term

A

Committed

47
Q

This type of fixed cost may be altered in the short-term by current managerial decisions

A

Discretionary

48
Q

A mixed cost contains both ________ & _________ elements

A

Variable & Fixed

49
Q

Give an example of a mixed costs? Why?

A

Utility Cost bc the fixed cost is the monthly rate (which stays the same) and t variable costs is the cost per hour (which varies)

50
Q

What is the equation for total mixed costs? What do they stand for?

A 
Y = a +bX
Y-> total mixed cost
a-> fixed costs
b-> the variable cost per unit of activity 
X-> the level of activity
51
Q

__________ are the difference in cost between any two alternatives.

A

Differential Costs

52
Q

A difference in revenue between two alternatives is called ________

A

Differential Revenue

53
Q

__________ have already been incurred and cannot be changed now or in the future.

A

Sunk Costs

54
Q

What cost should be ignored when making decisions?

A

Sunk Costs

55
Q

What is the potential benefit that is given up when one alternative is selected over another?

A

Opportunity Cost

56
Q

These costs are not usually found in

accounting records but must be explicitly considered in every decision

A

Opportunity Costs

57
Q

When are job-order costing systems used?

A
  1. Many different products are produced each period.
  2. Products are manufactured to order.
  3. The unique nature of each order requires tracing or allocating costs to each job, and maintaining cost records for each job.
58
Q

What are some examples of companies that would use job order costing?

A
  • aircraft manufacturing
  • large scale construction
  • movie production
59
Q

An ____________ __________, such as direct labor hours, direct labor dollars, or machine hours, is used to assign manufacturing overhead to individual jobs

A

allocation base

60
Q

Why do we use an allocation base?

A
  1. It is impossible or difficult to trace overhead costs to particular jobs.
  2. Manufacturing overhead consists of many different items ranging from the grease used in machines to the production manager’s salary.
  3. Many types of manufacturing overhead costs are fixed even though output fluctuates during the period.
61
Q

The __________ ________ ________ used to apply overhead to jobs is determined before the period begins.

A

Predetermined overhead rate (POHR)

62
Q

What is the POHR formula?

A

POHR= Estimated total manufacturingoverhead cost for the coming period/ Estimated total units in theallocation base for the coming period

63
Q

Why do we need the POHR?

A
  1. Actual overhead for the period is notknown until the end of the period, thus inhibiting the ability to estimate job costs during the period.
  2. Actual overhead costs can fluctuate seasonally, thus misleading decision makers.
64
Q

A _______ is a factor that causes overhead costs.

A

Cost driver

Managerial Accounting (2 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions