Unit 1 and 2

Question 1

Prime costs

Answer 1

direct material + direct labor

Question 2

Conversion costs

Answer 2

direct labor + o/h

Question 3

non-manufacturing costs

Answer 3

selling
admin
both direct/indirect

Question 4

product cost

Answer 4

recorded on [BS], attached to unit as it is purchased/manu + stay attached until sale [income st]

Question 5

period costs

Answer 5

selling and admin costs [IS]

Question 6

activity base/cost driver

Answer 6

measure o what causes the incurrence o variable cost

Question 7

committed v discretionary fixed costs

Answer 7

1. X be adjusted in ST

2. can be altered in ST

Question 8

Differential costs and revenues

Answer 8

those that change between alternative plans

Question 9

Contribution format used by

Answer 9

management

Question 10

contribution format

Answer 10

sales - VC = CM - FC = NI

Question 11

5 qualities of job order costing

Answer 11

diff products e period
manufactured to order
costs traced/allocated to jobs
cost records f each distinct product/job
o/h est + allocated @ predetermined rate

Question 12

3 qualities of process costs

Answer 12

single product f long periods
costs accumulated in dep
unit product cost = total cost/units

Question 13

predetermined overhead rate eq

Answer 13

est total manu o/h cost for next period/est total units in allocation base

Question 14

overhead applied eq

Answer 14

predetermined rate x actual activity

Question 15

single v multiple predetermined o/h bases

Answer 15

1. factory wide 2. dep

Question 16

absorption costing

Answer 16

inclusion o all manu costs (DM, DL, M O/H) in cost o product

Question 17

normal costing

Answer 17

application o o/h using predetermined o/h rate x actual # o allocation base incurred by job

Question 18

WIP inventory incl

Answer 18

raw mat inventory, direct labor, manu o/h

Question 19

(job order) [is] incl

Answer 19

COGS and period cost/selling+admin exp

Question 20

end o year inventory eq

Answer 20

raw material beginning + purchased = available - end of year = used

Question 21

cost of goods manufactured eq

Answer 21

WIP beginning + manu costs = WIP this period - WIP end = COG manu

Question 22

manu costs

Answer 22

DM + DL + manu O/H

Question 23

COGS eq

Answer 23

fin goods beginning + COG manu this period = COG avail - fin goods end = COGS

Question 24

over/underapplied o/h closed to

Answer 24

COGS

Question 25

underapplied/overapplied

Answer 25

under applied = o/h applied less than amount actual, added to COGS

Question 26

break even

Answer 26

``` NI = 0 CM = FC ```

Question 27

CM ratio eq (2)

Answer 27

total CM/total sales | unit CM/ unit selling price

Question 28

Break even analysis (3, but 2, lets be honest)

Answer 28

sales = VC + FC CM method: units sold = FC/unit CM total sales$ = FC/CM ratio

Question 29

BE point eq (considering target profit)

Answer 29

(FC + profit)/ unit CM

Question 30

margin o safety

Answer 30

Amount that current sales can decrease before losses occur

Question 31

operating leverage

Answer 31

Measures the sensitivity of net operating income to percentage change in sales

Question 32

degrees of operating leverage

Answer 32

CM/net operating income

Question 33

sales mix

Answer 33

Relative proportions in which a company’s products are sold

Question 34

Multip product BE analysis assumptions (4)

Answer 34

sales $ constant costs - linear sales mix - constant inventories X change

Question 35

Responsibility accounting def

Answer 35

- Managers should only be accountable for those items they can actually control to a significant extent

Question 36

participative budget systems

Answer 36

info down and up

Question 37

activity variances

Answer 37

differences between planning budget and flexible budget

Question 38

spending variances

Answer 38

diff between flexible budget and actual cost

Question 39

standard costs (4 qualities)

Answer 39

predetermined used f planning benchmarks f measuring perf simplifiy acct sys

Question 40

management by exception

Answer 40

focus on Q and costs that exceed standards

Question 41

total quality management

Answer 41

concept o 0 defects/waste

Question 42

price variance

Answer 42

AQpurch x AP | - (AQpurch x SP)

Question 43

quantity variance

Answer 43

AQused x SP | - SQ x SP

Question 44

total labor variance =

Answer 44

rate variance + efficiency variance

Question 45

labor rate variance

Answer 45

(AH x AP) | AH x SP

Question 46

labor efficiency variance

Answer 46

AH x SP | SH x SP