Are selling and administrative expenses treated as product costs or period costs under variable costing?
What are period costs.
100
This is a segments contribution margin less its traceable fixed costs. It represents the margin available after a segment has covered all of its own traceable costs.
What is the segment margin
100
This is an event that causes the consumption of overhead resources in an organization.
What is an activity.
100
This is a detailed schedule showing expected sales expressed in both dollars and units.
What is a sales budget.
100
This is a detailed schedule of planned expenses that will be incurred in areas other than manufacturing during a budget period.
What is the selling and administrative expense budget.
200
Any part or activity of an organization about which a manager seeks cost, revenue, or profit data. Examples include departments, operations, sales territories, divisions, and product lines.
What is a segment
200
This reduces the difference in reported net operating income between absorption and variable costing.
What is lean production.
200
These are activities that relate to specific products an must be carried out regardless of how many units are produced and sold.
What are product-related activities.
200
This is a method of preparing budgets in which managers prepare their own budgets. These budgets are then reviewed by higher-level managers, and any issues are resolved by a mutual agreement.
What is a self-imposed budget.
200
This is a detailed plan showing how cash resources will be acquired and used over a specific time period.
What is the cash budget
300
Under the contribution approach, these costs are assigned to a segment.
What are traceable costs.
300
This is a cost which is fixed and is incurred because of the existence of a particular business segment and would be eliminated if the segment were eliminated.
What is traceable fixed costs.
300
These types of costs should not be assigned to products in an activity-based costing system.
What are period costs.
300
This is a detailed plan showing the amount of raw materials that must be purchased to fulfill the production budget and to provide for adequate inventories.
What is the direct materials budget.
300
This is a group of key managers who are responsible for overall budgeting policy and for coordinating and the preparation of the budget.
What is the budget committee.
400
If these were allocated to segments, the cost of the segments would be overstated and their margins would be understated.
What are common costs.
400
Advocates for this costing method argue that it does a better job of matching costs and revenues than the other.
What is Absorption costing.
400
This process by which activity rates are used to apply costs to products and customers in activity-based costing.
What is second-stage allocation.
400
This is a 12-month budget that rolls forward one month as the current month is completed.
What is the continuous budget.
400
This budget shows the dollar of unsold finished goods inventory that will appear on the ending balance sheet.
What is the ending finished goods inventory budget.
500
Under this costing method the fixed manufacturing overhead is treated as a period cost and is expensed on the current period's income statement.
What is variable costing.
500
By doing this under absorption costing you can increase net operating income without increasing sales.
What is increasing the level of production.
500
This is a "bucket" in which costs are accumulated that relate to a single activity measure in an activity-based costing system.
What is an activity cost pool.
500
This is a series of separate but interdependent budgets that formally lay out the company's sales, production and financial goals.
What is the master budget.
500
This is a system of accountability in which managers are held liable for those items of revenue and costs -and only those items -over which they can exert significant cost control. The managers are held responsible for differences between budgeted and actual results.