WEEK 1
CH.1
CH.1
The company's managers and employees are examples of this type of user.
What are internal users for managerial accounting?
In ABC, an allocation base is often called a ______.
What is a cost driver?
This is the difference between net sales revenue and variable costs.
What is Contribution Margin?
_______ is the practice of comparing a company with its prior performance or with best practices from other companies.
What is Benchmarking?
This occurs when segment managers’ goals align with top management’s goals.
What is goal congruence?
The __________ has ultimate responsibility for implementing the company’s short- and long-term plans.
Who is the Chief Executive Officer (CEO)?
Predetermined overhead allocation rate × Actual quantity of the allocation base used
What is the formula for allocating manufacturing overhead costs?
This term _____ includes all product cost while this term ____considers only variable manufacturing costs.
What are Absorption costing and Variable costing
These are the two types of budgets.
What are strategic and operational budgets?
A _________ is a performance evaluation system that requires management to consider both financial performance measures and operational performance measures
What is a balanced scorecard?
These are the three kinds of inventory in a manufacturing company.
What are Raw Materials Inventory, Work-In-Process Inventory, and Finished Goods Inventory?
The asymmetrical change in costs when there is a decrease versus and increase in the volume of activity is called _________.
What is cost stickiness?
This is included in absorption costing but not in variable costing.
What is fixed manufacturing overhead?
_____ details how the business expects to go from the beginning cash balance to the desired ending cash balances.
What is the cash budget?
These are the formulas for ROI (return on investment) and Payback.
What is ROI = Operating Income/Average Total Assets?
What is Payback = Amount Invested/Expected Annual Net Cash Inflow?
These costs are expensed in the period they occur and include items like advertising, CEO salary, and office depreciation.
What are period costs?
This is the formula to calculate target cost.
What is "Target Cost = Target Sales Price - Desired Net Profit"?
If a company has plenty of unused capacity, it should accept a special order at a discounted price as long as the price is higher than this type of cost.
What are variable costs?
Define sensitivity analysis.
What is a technique used to see how changes in key assumptions, such as sales volume, prices, or costs, will affect a company’s financial outcomes?
This investment evaluation method resulted in a return of 12.5% when an asset generated an average annual operating income of $25,000 and had an average amount invested of $200,000.
What is the Accounting Rate of Return?
________ is a philosophy of continuous improvement of products and processes
What is Total Quality Management (TQM)?
Robusta Coffee Importers sold 6,000 units in October at a sales price of $45 per unit. The variable cost is $25 per unit. The monthly fixed costs are $12,000. This is the operating income earned in October.
What is $108,000?
Variable costing and absorption costing will result in different operating incomes when this happens.
When are Units produced more than units sold?When are Units produced less than units sold?
These are the four budgets for a merchandising company.
What are a capital expenditures budget, a cash budget, a budgeted income statement, and a budgeted balance sheet?
A project requires an initial investment of $180,000 and generates annual net cash inflows of $45,000. This is the payback.
What is 4 years?