FINAL

Question 1

information collected by managerial accountants

Answer 1

historical and estimated data

Question 2

what is historical data

Answer 2

provide objective measures of post operations

Question 3

what is estimated data

Answer 3

provide subjective estimates about future decisions

Question 4

what are the 5 elements of the management process?

Answer 4

planning, directing, controlling, improving and decision making

Question 5

what is planning?

Answer 5

used in developing the company goals and translating goals into courses of action

Question 6

what is directing?

Answer 6

a process by which managers run the day to day operations

Question 7

what is controlling?

Answer 7

monitoring operating results with the expected results

Question 8

what is improving?

Answer 8

continuous process improvement

management by exception

Question 9

what is decision making?

Answer 9

inherent in each of the preceding management processes

when managing a company management must continually decide among alternative actions

Question 10

strategic planning

Answer 10

long term strategies

Question 11

operational planning

Answer 11

short term strategies

day to day

Question 12

continuous process improvement

Answer 12

philosophy of continually improving employees, business processes, products, etc
to eliminate the source of problems in a process

Question 13

management by exception

Answer 13

philosophy of controlling by comparing actual and expected results

Question 14

direct costs

Answer 14

identified with and traced to a cost object

ex: cost of wood to make a guitar

Question 15

indirect costs

Answer 15

are not identified with or traced to a cost object

ex: cost of salaries of supervisors in guitar making

Question 16

period costs

Answer 16

-Selling and administrative expenses incurred in marketing the product, delivering the product, or managing the company and not directly related to manufacturing the product.
-used in generating rev during the current period
not involved in the manufacturing process
recorded as expenses of the current period

Question 17

prime costs

Answer 17

The combination of direct materials and direct labor costs.

Question 18

product costs

Answer 18

The three components of manufacturing cost: direct materials, direct labor, and factory overhead costs.

Question 19

underapplied foh

Answer 19

the amount applied (using POHR) is LESS THAN the actual amount
factory oh will have debit balance

Question 20

overapplied foh

Answer 20

the amount applied (using POHR) is GREATER THAN the actual amount
FOH will have credit balance

Question 21

product costing allocating methods

Answer 21

single plantwide FOH rate method

multiple productions dept FOH rate method

activity based costing method

Question 22

single plantwide method

Answer 22

costs are allocated to products using only one rate total
budgeted FOH/total budgeted plantwide allocation base
simple and inexpensive

Question 23

Multiple production dept FOH rate method

Answer 23

uses diff rates for each dept to allocate FOH costs to products

budgeted dept FOH/budgeted dept allocation base

Question 24

ABC method

Answer 24

provides an alternative approach for allocating FOH that uses multiple FOH rates based on diff activities

costs are initially budgeted for activities

budgeted activity costs/total activity base usage used for each activity

Question 25

variable costs

Answer 25

Vary in proportion to changes in activity base Total: -Increases and decreases proportionately w/ activity level per unit: Remains the same regardless of activity level

Question 26

fixed costs

Answer 26

Remain the same in total dollar amount as the activity base changes total:Remains the same regardless of activity level per unit: Increases and decreases inversely with activity level

Question 27

order of budgets for preparation

Answer 27

Operating - Sales - Production - Direct material purchases - Direct labor cost - FOH - COGs - Selling & admin expenses (uses sales budget as the starting point) - Budgeted income statement (sales, cogs, selling and admin)

Question 28

direct materials and direct labor costs are normally classified as

Answer 28

variable costs

Question 29

high low method

Answer 29

- Cost estimation methods - Find the highest point in units produced and subtract the lowest amount (units produced and total cost) - Variable cost per unit: difference in total cost/difference in units produced

Question 30

mixed costs

Answer 30

have characteristics of both a variable and a fixed cost For purposes of analysis, mixed costs are usually separated into their fixed and variable components by using the high-low method

Question 31

contribution margin ratio

Answer 31

- indicates the percentage of each sales dollar available to cover fixed costs and to provide operating income - contribution margin/sales

Question 32

types of budgets

Answer 32

``` static flexible zero based continuous operating financial ```

Question 33

static budget

Answer 33

shows the expected results of a responsibility center for only one activity level Once the budget has been determined, it is not changed, even if the activity changes.

Question 34

flexible budget

Answer 34

show the expected results of a responsibility center for several activity levels, series of static budgets.

Question 35

zero based

Answer 35

requires managers to estimate sales, production, and other operating data as though operations are being started for the first time

Question 36

continuous

Answer 36

maintains a 12-month projection into the future. The 12-month budget is continually revised by replacing the data for the month just ended with the budget data for the same month in the next year,

Question 37

operating budget

Answer 37

sales, COGS budget, production, dm purchased, dl cost, FOH, sell + admin,can be used to prepare a budgeted income statement

Question 38

financial budget

Answer 38

cash, cash expenditure,provide info for a budgeted balance sheet

Question 39

standard cost includes

Answer 39

direct materials foh direct labor

Question 40

ideal standards

Answer 40

only achieved with perfect conditions

Question 41

normal standards

Answer 41

attained with reasonable effort allow for normal production difficulties and mistakes employees focus more on cost and are more likely to put forth best efforts

Question 42

what 2 components can the standards for direct materials, labor, and foh be separated into?

Answer 42

cost an quantity

Question 43

when is a variance unfavorable?

Answer 43

actual>standard

Question 44

when is a variance favorable?

Answer 44

standard>actual

Question 45

what is cost variances?

Answer 45

difference between actual and standard costs

Question 46

what is a total manufacturing cost variance?

Answer 46

difference between total standard costs and total actual costs

Question 47

total direct material variance is separated into what

Answer 47

a price and quantity variance

Question 48

total direct labor variance is separated into what

Answer 48

a rate and time variance

Question 49

direct materials price variance

Answer 49

(actual price - standard price) * actual quantity

Question 50

direct materials quantity variance

Answer 50

(actual quantity- standard quantity) * standard price

Question 51

direct labor variance formula

Answer 51

(actual rate per/h - standard rate per/h) * actual hours

Question 52

direct labor time variance formula

Answer 52

(actual direct labor hours - standard direct labor hours) * standard rate per/h

Question 53

conversion costs

Answer 53

direct labor and foh

Question 54

COGS manufactures

Answer 54

work in process inventory beg of month (cr) cost of dm used in production + dl + foh (de) = Total manufacturing costs incurred (cr) + work in process inventory beg = total man costs - work in process inventory end of month = cogs man

Question 55

break even in sales units

Answer 55

fixed costs/ unit contribution margin

Question 56

unit contribution margin

Answer 56

sales price per unit-var cost per unit

Question 57

prepare a flexible budget

Answer 57

total sales across top Variable cost add all variable costs together for each sale amount total var cost Fixed costs add all fixed costs together for each sale amount (amounts remain the same) total fixed costs add total var and fixed costs for total _____

Question 58

activity rate formula

Answer 58

budgeted activity cost/total activity base usage