ACC 256 Final Exam Review

Cost Basics and Ethics

100

What type of accounting provides information to internal users? 

Managerial accounting 

200

Purposely leaving out relevant information violates which IMA standard?

Credibility

300

This type of cost is expensed in the period incurred, not tied to production 

Period cost 

400

Inspection of incoming materials is classified as this type of "cost of quality"

Appraisal cost 

500

Activities whose cost occur regardless of output level are called? 

Facility level activities 

Costing Systems and Overhead

100

This costing system is used by companies producing identical products (like soda or toys)

Process costing 

200

Activity Based Costing reduces this issue in costing systems 

Cost distortion

300

The formula used to calculate predetermined overhead rate is 

Estimated overhead / estimated allocation base 

400

If allocation overhead exceeds actual overhead, it is called 

Overallocated 

500

Using 80,000 machine hours and $320,000 overhead - what is the rate per machine hour 

$4 per machine hour 

(= 320,000 / 80,000)

CVP and Cost Behavior

100

The x in y = vx +f represents 

The number of units 

200

Using y = 3x + 90,000, what is the total cost at 20,000 units? 

$150,000 

(=3(20,000) + 90,000)

300

This type of income statement separates variable and fixed costs 

Contribution margin income statement 

400

Break-even occurs when what value equal zero 

Operating income 

500

If the CM per unit is $2 and fixed costs are $50,000, what is the breakeven in units? 

25,000 units 

(= 50,000 / 2)

Decision Making

100

Relevant information must 

Relate to the future and differ among alternatives 

200

Special orders should only be accepted if the special sales price exceeds the 

Incremental cost (variable cost) of production

300

Where are variable costs located in relation to the contribution margin line on the contribution margin income statement 

Above 

400

If a company has excess capacity, fixed cost are treated as what in the decision making process 

Irrelevant 

500

Accepting a special order for 6,000 units at a price of $25 with a variable cost of $18 would impact income by

$42,000 increase to income 

(=6,000 ( 25-18))

Budgeting and Performance

100

Beginning cash plus cash collections minus cash payments determines 

Ending cash balance 

200

This budget adjusts for actual activity levels but uses standard (budget) prices 

Flexible budget 

300

Recruiting and keeping the best employees falls under this balanced scorecard perspective 

Learning and growth 

400

This concept focuses only on investigating large variances 

Management by exception 

500

Beginning cash was $10,000, cash payments were $15,000 and cash payments were $20,000. 

If minimum cash is $10,000, how much will the company need to borrow to meet the minimum? 

$5,000

(= 10+15-20 = 5, so need 5 more)

Variance and Performance Metrics

100

Higher revenues than expected create this type of variance

Favorable 

200

Using more or less time than expected creates this labor variance 

Direct labor efficiency variance 

300

Return on Investment (ROI) is calculated using what two components? 

Sales margin and capital turnover 

400

Residual income equals operating income minus what?

Minimum acceptable income 

500

If a company bought 50,000 pounds of material for a price of $5 per pound and the standard price was $3.50 per pound, what is the DM price variance? 

$75,000

=(50,000 (5-3.5))