Accounting Ii Exam

Front 1

Incremental cost

Back 1

Additional cost incurred only if a company pursues a specific course of action.

Front 2

Controllable variance

Back 2

Combination of both overhead spending variances (variable and fixed) and the variable overhead efficiency variance.

OH Spending Variances (variable and fixed) + variable overhead efficiency variance

Front 3

Cost variance

Back 3

Difference between the actual incurred cost and the standard cost.

Actual incurred cost - standard cost

Front 4

Efficiency variance

Back 4

Difference between the actual quantity of an input and the standard quantity of that input.

actual quantity of an input - standard quantity of that input

Front 5

Favorable variance

Back 5

Difference in actual revenues or expenses from the budgeted amount that contributes to a higher income.

Front 6

Overhead cost variance

Back 6

Difference between the total overhead cost applied to products and the total overhead cost actually incurred.

Front 7

Price variance

Back 7

Difference between actual and budgeted revenue or cost caused by the difference between the actual price per unit and the budgeted price per unit.

Front 8

Quantity variance

Back 8

Difference between actual and budgeted revenue or cost caused by the difference between the actual number of units and the budgeted number of units.

Front 9

Spending variance

Back 9

Difference between the actual price of an item and its standard price.

Front 10

Standard costs

Back 10

Costs that should be incurred under normal conditions to produce a product or component or to perform a service.

Front 11

Unfavorable variance

Back 11

Difference in revenues or costs, when the actual amount is compared to the budgeted amount, that contributes to a lower income.

Front 12

Volume variance

Back 12

Difference between two dollar amounts of fixed overhead cost; one amount is the total budgeted overhead cost, and the other is the overhead cost allocated to products using the predetermined fixed overhead rate.

Front 13

Mixed cost

Back 13

Cost that behaves like a combination of fixed and variable costs.

Front 14

Step-wise cost

Back 14

Cost that remains fixed over limited ranges of volumes but changes by a lump sum when volume changes occur outside these limited ranges.

Front 15

Curvilinear cost

Back 15

Cost that changes with volume but not at a constant rate.

Front 16

Fixed cost

Back 16

Cost that does not change with changes in the volume of activity.

Front 17

Opportunity Cost

Back 17

Potential benefit lost by choosing a specific action from one or more alternatives.

Front 18

Out-of-Pocket Cost

Back 18

Cost incurred or avoided as a result of management's decisions.

Front 19

Sunk cost

Back 19

Cost already incurred and cannot be avoided or changed.

Front 20

Variable Cost

Back 20

Cost that changes in proportion to changes in the activity output volume.