Karen Is So Sleepy

Front 1

1) Managerial Accounting focuses on and can be used by

a. A focus on reporting to personnel within an organization.
b. A focus on providing information that is relevant for planning, decision making, directing, and control.
c. Any company including law firm, non-profit organization, etc.
d. All of the above

Back 1

D

Front 2

2) Employee empowerment involves encouraging and authorizing workers to take initiative to :
a. Improve operations
b. Reduce costs
c. Improve product quality
d. Improve customer service.
e. All of the above

Back 2

E

Front 3

3) Which of the following would not be classified as a period cost?
a. Sales commission
b. Administrative expenses
c. Insurance on a manufacturing plant.
d. Salaries of the top management

Back 3

C

Front 4

What is direct labor cost?

Back 4

The cost of salaries, wages, and fringe benefits for personnel who work directly on the manufactured products.

Front 5

Which of the following manufacturers would most likely use job-order costing?

A. Chemical manufacturers.
B. Microchip processors.
C. Custom-furniture manufacturers.
D. Gasoline refiners.
E. Fertilizer manufacturers.

Back 5

C

Front 6

As production takes place, manufacturing costs go into ______________

Back 6

work-in-process inventory,
NOT COGS,
NOT mfg overhead account, etc.

Front 7

7) Which of the following manufacturers would most likely use process costing?
A. Chemical manufacturers
B. Microchip processors
C. Gasoline refiners
D. Fertilizer manufacturers.
E. All of the above

Back 7

E

Under process costing, direct material and conversion costs(direct labor and mfg oh) are first assigned to each of the processes used in the manufacturing operation. Then, the costs of each process are assigned to the units worked on in the department.

Front 8

8) Formula for when you have beginning inventory, goods added in the middle, and ending inventory?

Back 8

beginning inventory + x amount of goods added in the middle – ending inventory

example?

Front 9

9) Traditional costing systems, which are really used in financial accounting, overheads are combined into

Back 9

one single volume-related cost pool

Front 10

MATH:
Use weighted average when costs are allocated among different departments.

Back 10

i. 10000 calls, 6k in one department, 4k in the other.
ii. (4000/1000) x total cost incurred by both departments

Front 11

Relationship between cost and activity is ______.
A) cost behavior
B) cost estimation
C) cost prediction
D) Cost analysis

Back 11

A

Front 12

Montgomery Company has a variable selling cost. If sales volume increases, how will the total variable cost and the variable cost per unit behave?

Back 12

Total variable cost increases and
variable cost per unit will stay the same.

Front 13

As your sales volume increases, variable cost changes in _____ proportion to activity level.

Back 13

Direct proportion

Front 14

As production goes down, what happens to total fixed overhead and total variable overhead?

Back 14

Total fixed overhead cost stays the same!
But total variable overhead will decrease.

Front 15

Cost volume profitability analysis (CVP) is the use of ____, ____, and ____ to analyze everything associated with the company.

Back 15

1) Variable Cost
2) Fixed Cost
3) Product Sales

Front 16

Break even point is where ______

Back 16

total revenue = total expense (also known as cost)

Front 17

17) What must be done to lower break-even point?

Back 17

Lower fixed cost
Lower variable cost
Increase sales price.

Front 18

18) A company has fixed cost of $1,000 and contribution margin per unit at $5. What is contribution margin and what is the break even point?

Back 18

Contribution margin goes towards to paying for fixed costs. Also, it is contribution margin = sales revenue less variable expense.
Break even point is fixed expense / contribution margin, which is equal to 1000/5= $200.

Front 19

After sales reach break even point, what does each contribution margin per unit represent?

Back 19

contribution margin is the amount a company makes after break-even point has been met.

Front 20

Under variable costing, fixed manufacturing overhead is expensed when?

Back 20

Immediately;
because under variable costing, fixed mfg overhead is a period cost.

Front 21

What is the difference between absorption and variable costing?

Back 21

The treatment in fixed manufacturing overhead.
Also, variable selling and admin. cost., where it is included in period cost for AC.

Front 22

22) MATH:
Variable vs. fixed costing:
Q:
If your fixed cost is $500,000. variable cost is $20, and planned to build 50,000 units, but only build 40,000. What is the total cost?

Back 22

Total Cost= $500,000 + 20(40,000)
= $1.3 million

Front 23

What is budgeting used for?

Back 23

1) Planning future
2) Evaluate (variances)
3) Coordinate activity
4) measure activities of the company vs. our goals.
5) achieve goal congruence.

Front 24

Budget covers what time periods?

Back 24

All time periods (month, half-a year, year, etc).

Front 25

Variances are computed by taking the difference between the ________.

Back 25

actual cost and standard cost.

Front 26

What is management by exception?

Back 26

defined as the devoting management time, to investigate significant variance.

Front 27

Calculate the labor efficiency variance

AH = 1,520
SH = 1,500
SR = $20
AR= $22

Back 27

=SR (AH - SH)
= 20 (1,520 - 1,500)
= 400 unfavorable

Front 28

Which accounting method has the strongest cause/effect relationship with overhead cost?

Back 28

ABC

Front 29

The difference between the actual and variable occurred

Back 29

sum of the both spending variance and the efficiency variance

Front 30

What is the term for key to the budget process is to make sure top management is setting top goals and the same page

Back 30

goal congruence.

Front 31

What is a cost center

Back 31

Organizational subunit whose manager is held accountable for the costs incurred in the subunit. Does not produce revenue!

The painting department in an automobile plant is an example of a cost center. Kitchen.

Front 32

What is a profit center

Back 32

Held accountable for both the revenue and expenses attributed to their subunits.

The restaurant.

Front 33

What is a investment center

Back 33

controls over investments as well as revenue/costs.

ex: corporation

Front 34

What is ROI

Back 34

how effectively the company use the money

= income / invested capital

Front 35

35. what can decrease ROI?

Back 35

a. Decrease in sales, increase in our expenses, increase in amount of capital

Front 36

36. Calculation: Calculate return on investment.

Profit = 100 million
Invested capital = 500 million

Back 36

ROI = income / invested capital
• Then ROI would be 20% = 100/500

Front 37

Calculate residual income:

Back 37

residual income = profit that remains after subtracting an imputed interest charge.

a. Imputed interest rate = 5% , total invested capital = 500mil
b. Then .05 x 500mil = 25 million
c. Residual income would be 75 million. (100mil – 25 mil = 75 mil)

Front 38

38. Accounting informational system, that information should be
a. Relevant
b. Accurate
c. Timely.
d. All of the above

Back 38

D

Front 39

39. Most of the time when we have to make a decision,
what is the tradeoff?

Back 39

Accuracy vs. timeliness.

Front 40

40. Pricing? What influences pricing?
a. Market conditions
b. Cost of the product/ cost to manufacture
c. Customer demand.
d. All of the above.

Back 40

D

Front 41

cost pricing formula = cost + markup.
a. Markup = (markup % + cost) , Cost = $100, Markup %= 10%

Back 41

100 + (100 x .1) = $110.

Front 42

42. capital budgeting decisions?

Back 42

a. They do not involve cash flows, emergencies. So they are long term decisions.
b. Analyzing long term decisions, we use Internal Rate of Return and Net Present Value.

Front 43

43. What is Net Present Value?

Back 43

a. Projected cash flows associated with machine
b. Time value of money: money today is worth more than cash flow in the future.

Front 44

What is IRR ?

Back 44

True economic return earned by the asset over its life.

=discount rate on a NPV calculation yields 0.

Front 45

What are the ways we could allocate service costs to manufacturing overhead.

Back 45

a. Direct method.
b. Step down method.

Front 46

What is a direct method?
all service costs are allocated to ________ department?

Back 46

Direct Method.
a. All service costs are eventually allocated to production department. Once allocated, costs are recirculated back.

Front 47

What is a Split-Off Cost

Back 47

Joint production allocation process.

Point where individual process becomes a separately identifiable. (oil flowing through the pipeline, then split off point to other products (cars, jet fuel).

Front 48

48. Under Duel cost allocation, fixed cost are allocated _______ and variable costs are allocated __________.

Back 48

Varaible costs are allocated on the basis of short-run usage, and
fixed costs are allcoated on the basis of long-run average uses.

Fixed costs are allocated under user department.
Long run usage on that departments output.