Costs
Costs that change with activity level
Variable Costs
A comprehensive financial plan to achieve financial and operational goals of a company
Budget
Managers use incremental analysis to decide whether to accept or reject an order that is outside the scope of normal sales.
Special Order Decision
The author of "The Cat in the Hat"
Dr. Seuss
The difference between actual and budgeted results
Variance
Costs incurred in the past
Sunk cost
Last month's ending inventory is this month's _____ ______.
Beginning Inventory
A fixed cost that can be attributed to a specific segment of the business
Direct Fixed Cost
Worlds largest rainforest
The Amazon
Standard costs are..
the expected level of performance
Cost that can be avoided by choosing one decision alternative over another, has potential to influence a decision
Avoidable/ Relevant Cost
Set of linked budgets that can be classified as either operational or financial
Master Budget
Limited resource that restricts a company's ability to satisfy demand
Bottleneck
The phrase "the British are coming" comes from this historical figure
Paul Revere
If actual costs > standard costs, what kind of variance is it?
Unfavorable Variance
Costs that differ between decision alternatives
Incremental or differential costs
These two budgets are needed to prepare the Direct Labor Budget (must be in order or no points)
Sales Budget, Production Budget
Name any step of the decision making process
Step 1: Identify decision problem
Step 2: Determine decision alternatives
Step 3: Evaluate costs/benefits of alternatives
Step 4: Make the decision
Step 5: Review results of the decision
Much like a person’s fingerprint, a dog’s ____ print is unique
Nose
Revised budget that adjusts for actual units produced and sold
Flexible Budget
When a company is operating at ____ ______, the limit on resources has been reached, and making the choice to do one thing means giving up the opportunity to do something else
Full Capacity
What is the Total Budgeted Direct Labor Cost:
Budgeted Unit Sales: 500
Budgeted End. FG Inv: 125
Budgeted Beg. FG Inv: 150
DLH per Unit: 2
DL Cost per Hour: 7.25
(500 + 125 - 150) * 2 * 7.25 = $6,887.50
What is incremental profit?
Special order proposal: 10,000 for $100 each
Normal Sales Price: $150
DM: $40
DL: 20
VOH: 20
FOH: 30
100 price - 80 vc = $20
(20)(10,000) = $200,000
According to wildlife biologist, Richard Thomas, how much wood would a woodchuck chuck if a woodchuck could chuck wood?
Find standard material price per pound:
- Produced 28,000
- 58,200 lbs of raw materials purchased at $1.50 per lb
-Materials price variance = $5,440 U
DM Price Variance = AQ (SP - AP)
-5440 = 58,200 (SP - 1.5)
SP = $1.41