ACCT 2101: EXAM 1
48 Cards in this Set
| Front | Back |
|---|---|
|
Managerial Accounting
|
Provides useful information for management to make decisions.
|
|
Variable Cost
|
Those that change in total, in direct proportion to changes in activity levels. However per unit or average variable remains the same (is set) for every unit
|
|
Fixed Cost
|
Those that stay the same in total, regardless of activity level, but per unit, they vary inversely with the units of activity.
|
|
Product/Inventoriable Costs
|
costs that are assigned to the product as it is being manufactured
|
|
Period Cost
|
costs that are expensed as they are incurred. No clear association with the timing of the making of the product
|
|
Relevant Cost
|
cost that has the potential to influence a decision. Must occur in the future and differ between alternatives
|
|
Irrelevant Cost
|
will not influence the decision at hand.
|
|
Sunk Cost
|
cost that has already been incurred. Never relevant.
|
|
Prime Cost
|
The basic costs of a unit of product
|
|
Conversion Costs
|
The costs of transforming a raw material into a finished unit of product.
|
|
Cost Accounting Systems
|
Involve the measuring, recording, and reporting of product costs.
|
|
Job Order Cost System
|
Costs are accumulated and assigned to each job individually. Each job has distinguishing characteristics. Unique products are costed out when the job is completed
|
|
Cost Behavior
|
How a total cost responds to changes in some measure of activity level
|
|
Step Costs
|
Costs that are fixed over a range of activity and then increase in a step-like fashion when a capacity limit is reached. Step variable - narrow range to steps and step-fixed wider range to steps
|
|
Breakeven Point
|
The point at which total fixed costs are completely covered and there is zero profit.
|
|
Target Income
|
The amount of income that a company wants to generate. Simply treat the amount as a fixed cost and then modify the breakeven formulas.
|
|
Margin of Safety
|
The difference between actual or expected sales and sales at the break-even point. (Cushion)
|
|
Cost Structure
|
Refers to how a company uses variable costs versus fixed costs to perform its operations.
|
|
Operating Leverage
|
Refers to the extent to which fixed costs are used to operate a business and how a company's net income reacts to a given change in sales.
|
|
Period Costs
|
Also known as Non-manufacturing Costs
|
|
Prime Costs
|
Direct Materials Used + Direct labor
|
|
Conversion Costs
|
Direct Labor + Manufacturing Overhead
|
|
F
|
(T/F) Planning involves coordinating the diverse activities and human resources of a company to produce a smooth running operation.
|
|
F
|
(T/F) The wages of maintenance employees, timekeepers, and supervisors are usually classified as direct labor.
|
|
T
|
(T/F) Product costs are also called inventoriable costs.
|
|
T
|
(T/F) Directing involves coordination the diverse human resources of a company to produce a smooth running operation.
|
|
F
|
(T/F) Raw Materials Inventory shows the cost of completed goods on hand.
|
|
F
|
(T/F) A company cannot use both a job order system and a process cost system.
|
|
T
|
(T/F) The predetermined overhead are is based on the relationship between estimated annual overhead costs and expected annual operating capacity
expressed in terms of a common activity base.
|
|
F
|
(T/F) Variable cost per unit changes as the level of activity changes.
|
|
T
|
(T/F) Fixed costs remain the same in total regardless of changes in the activity index.
|
|
T
|
(T/F) Under the high-low method, the variable cost per unit is computed by dividing the change in total costs by the change in total activity.
|
|
b. They provide general purpose information for all users.
|
Which of the following would not describe managerial accounting reports?
a. They are internal reports.
b. They provide general purpose information for all users.
c. They are issued as frequently as the need arises.
d. The reporting standard is relevance to the decision to be made.
|
|
a. Yes No
|
Property taxes on a manufacturing plant are an element of :
Product cost Period cost
a. Yes No
b. Yes Yes
c. No Yes
d. No No
|
|
d. $138,000
|
N Company has beginning and ending raw materials inventories of $32,000 and $40,000, respectively. If direct materials used are $130,000,
what is the cost of raw material purchases?
a. $130,000
b. $140,000
c. $122,000
d. $138,000
|
|
d. all of the above
|
Cost accounting involves the following activities pertaining to product costs:
a. measuring
b. recording
c. reporting
d. all of the above
|
|
c. cereal
|
Job order costing would not be used by a company that manufactures:
a. homes
b. motion pictures
c. cereal
d. bridges
|
|
b. direct labor
|
A cost that would not be included in the Manufacturing Overhead account is:
a. factory utilities
b. direct labor
c. indirect labor
d. depreciation expense on factory machinery
|
|
c. $90,000
|
J company applies overhead on the basis of 200% of direct labor cost. Job # 501 is charges with $30,000 of direct materials and $40,000 of
manufacturing overhead. The total manufacturing costs for Job # 501 is:
a. $70,000
b. $110,000
c. $90,000
d. $100,000
|
|
c. $10,000 over-applied
|
The E Company uses a predetermined overhead rate of $5 per direct labor hour. In December, actual overhead amounted to $650,000 and actual
direct labor hours were 132,000. For the month, overhead was :
a. $50,000 over-applied
b. $50,000 under-applied
c. $10,000 over-applied
d. $10,00…
|
|
c. both (a) and (b)
|
Fixed costs are costs that:
a. remain the same in total regardless of changes in the activity level.
b. vary inversely with activity on a per unit basis
c. both (a) and (b)
d. neither (a) nor (b)
|
|
c. variable costs as a percentage of sales decrease.
|
The contribution margin ratio (%) increases when:
a. fixed costs increase
b. fixed costs decrease.
c. variable costs as a percentage of sales decrease.
d. variable costs as a percentage of sales increase.
|
|
c. variable costs per unit increases.
|
The contribution margin per unit decreases when unit selling price remains the same and:
a. fixed costs increase
b. fixed costs decrease.
c. variable costs per unit increases.
d. variable costs per unit decreases.
|
|
b. 50,000
|
The following information is taken from Coumes Co.'s Year 1 contribution income statement:
Sales: 200,000
Contribution Margin: 120,000
Fixed Costs: 90,000
What was Coumes's Margin of Safety?
a. 182,000
b. 50,000
c. 150,000
d. 168,000
|
|
c. 40,000
|
Shaw Co. had variable costs of 25% of sales, and fixed costs of $30,000. Shaw's break-even point in sales dollars was:
a. 30,000
b. 120,00
c. 40,000
d. 24,000
|
|
c. $50,000
|
The following information pertains to Syl Co.:
Revenues $800,000
Variable Costs $160,000
Fixed Costs $40,000
What is Syl's breakeven point in revenues?
a. $200,000
b. $160,000
c. $50,000
d. $40,000
|
|
(+) BWIP (what happened yesterday)
Current Manufacturing Costs (today)
Direct Materials Used:
Beg Raw Materials
+ Purchases
Total Available
- End Raw Materials
(+) = DM Used
(+)Direct labor
(+)Manufacturing Overhead Applied
(+) =Subtotal Current Manufacturing Costs
(=) Total …
|
COG Manufactured Schedule:
|
|
Beginning Finished Goods
+ Cost of Goods Manufactured
= Available for Sale
- Ending Finished Goods
- Cost of Goods Sold
(+ or - adjustment for under or over applied OH)
|
COGS Schedule:
|
ACCT 2101: TEST 1