Final

Question 1

Direct materials used(Raw Materials Inventory)=

Answer 1

Beginning raw materials inventory
\+Purchases
=Materials available for use
-Ending raw materials inventory
=Direct Materials Used

Question 2

Cost of Goods Sold=

Answer 2

Beginning Inventory
\+Purchases
=Cost of Goods Available for Sale
-Ending Inventory
=Cost of Goods sold

Question 3

Work In Process Inventory=

Answer 3

Beginning WIP
+Total Manufacturing Costs(DM+DL+MOH)
-Ending WIP
=Cost of goods manufactured

Question 4

Total Current Assets=

Answer 4

Cash
+Accounts Payable
+Total Inventory
+Prepaid Expenses

Question 5

Purchases include

Answer 5

Import duties, freight in, and items purchased

Question 6

Operating Income=

Answer 6

Sales
-Cost of Goods Sold
=Gross Profit
-Operating Expenses
=Operating Income

Question 7

Gross Profit=

Answer 7

Sales
-Cost of Goods Sold
=Gross Profit

Question 8

Variable costs change in ______ proportion to volume

Answer 8

Direct

Question 9

Fixed costs stay the same, but are PER UNIT change ______ to volume

Answer 9

Inversely

Question 10

Total mixed costs ______ as volume increases

Answer 10

Increase

Question 11

Mixed costs PER UNIT ______ as volume increases

Answer 11

Decrease

Question 12

Relevant range is when Total fixed costs and variable costs per unit ______

Answer 12

Stay the same

Question 13

High Low method step 1

Answer 13

Find the highest and lowest volume points and calculate slope

Question 14

High Low method step 2

Answer 14

Find the fixed cost component by using the slope and data from either high/low points.
y=vx+f

Question 15

High Low method step 3

Answer 15

Using the variable cost per unit from step 1 and the fixed cost from step 2 write an equation
y=8x+8000

Question 16

Variable manufacturing costs include

Answer 16

Direct labor, Direct materials, variable MOH

Question 17

Fixed MOH costs include

Answer 17

taxes, insurance on the plant, straight line depreciation, lease payments

Question 18

Absorption costing includes _________,_______,_______,_______, where as variable costing does not include _______.

Answer 18

DM, DL, Variable MOH, Fixed MOH,

Fixed MOH

Question 19

Contribution Margin =

Answer 19

Sales revenue

-variable expenses

Question 20

Operating income=

Answer 20

Sales
-Variable expenses
=Contribution Margin
-Fixed expenses
=Operating Income

Question 21

Contribution margin ratio=

Answer 21

Unit contribution margin/sales price per unit

or
contribution margin/sales revenue

Question 22

Contribution margin per unit=

Answer 22

Sales price per unit
-Variable cost per unit
=CM per unit

Question 23

To find sales in units=

Answer 23

(Fixed expenses+Operating income)/CM per unit

Question 24

To find sales in dollars=

Answer 24

(fixed expenses+operating income)/CM ratio

Question 25

Operating leverage factor=

Answer 25

CM/Operating income

Question 26

Margin of safety=

Answer 26

Expected sales | -Breakeven sales

Question 27

Target Total Costs=

Answer 27

Revenue at market price -Desired profit =Target Total Cost

Question 28

Strategic planning is _____ term goals

Answer 28

long

Question 29

What is the master budget?

Answer 29

The comprehensive planning document for the entire organization

Question 30

Units to Produce= Production Budget

Answer 30

``` Units needed for sales +Desired ending inventory =Total units needed -Units in beginning inventory =Units to produce ```

Question 31

safety stock

Answer 31

Inventory kept on hand incase demand is higher | Also considered desired ending inventory

Question 32

Quantity of DM to purchase= DM budget

Answer 32

``` Quantity of DM needed for production +Desired DM ending inventory =Total quantity of DM needed -DM beginning inventory =Quantity of DM to purchase ```

Question 33

Total Direct Labor Cost= DL budget

Answer 33

``` Units to be produced *DL hours perunit =Total DL hours required *DL cost per hour =total DL cost ```

Question 34

Net Income=

Answer 34

``` Sales Revenue -COGS =Gross Profit -Operating Expenses =Operating Income -Interest Expense -Income Tax expense =Net Income ```

Question 35

Flexible budgets

Answer 35

Budgets prepared for different volumes of activity

Question 36

Return on Investment= | ROT

Answer 36

Operating income / Total assets

Question 37

Sales margin= | SOS

Answer 37

Operating income / sales

Question 38

Capital Turnover= | CST

Answer 38

Sales / total assets

Question 39

Residual Income= | RIOTT

Answer 39

operating income - (target rate of return * total assets)

Question 40

Master budget variance=

Answer 40

actual revenues/expenses and the master budget

Question 41

Flexible budget variance=

Answer 41

flexible budget | -actual results

Question 42

Return on investment

Answer 42

measures the amount of income an investment center earns relative to the size of it's assets

Question 43

Residual income

Answer 43

determines whether the division has created any excess income above and beyond expectations

Question 44

sales margin

Answer 44

focuses on profitability by showing how much operating income the division earns on every $1.

Question 45

Capital turnover

Answer 45

focuses on how efficiently the division uses its assets to generate sales revenue

Question 46

Flexible budget

Answer 46

budgets based on the actual activity of a period

Question 47

sales volume variance is

Answer 47

units actually sold | -number of unites expected to be sold according to the static or original budget

Question 48

Direct Materials Quantity Variance=

Answer 48

Standard Price * (Std Quant Allowed - Actual Quantity Used)

Question 49

Direct Labor Efficiency Variance=

Answer 49

Standard rate * (Standard Hours Allowed - Actual Hours)

Question 50

Direct Labor Rate Variance=

Answer 50

Actual hours * (Standard rate - actual rate)

Question 51

Direct Material Price Variance=

Answer 51

Actual Quantity Purchased * (Standard price- actual price)

Question 52

Payback Period=

Answer 52

Amount invested / expected annual net cash inflow

Question 53

Accounting Rate of Return=

Answer 53

Average annual operating income from asset / initial investment or (Average annual net cash flow - depreciation expense) / initial investment

Question 54

Annual depreciation expense=

Answer 54

(Initial cost of asset - residual value) / useful life of asset

Question 55

Factors affecting the time value of money:

Answer 55

Principal, number of periods, interest rate