Accounting Basics
This is the primary goal of managerial accounting.
What is to provide information to internal decision-makers?
This worker’s wage qualifies as direct labor.
Who is a machine operator?
This is an example of manufacturing overhead in a bottle factory.
What is utility costs for the factory?
Employee satisfaction would fall under this scorecard perspective.
What is learning and growth?
The company saved $2 per hour for 500 hours of labor. [Direct Labor Rate Variance]
What is $1,000 favorable?
Disclosing internal project costs to a newspaper violates this ethical standard.
What is confidentiality?
A key advantage of budgeting is this.
What is controlling (responsibility of a manager)?
Among advertising, cleaning products, assembly line wages, and direct materials, this is not a product cost.
What is advertising?
A manufacturing plant is typically this type of center.
What is a cost center?
The company used this many more hours than the standard allowed for producing 15,000 units. [Direct Labor Efficiency Variance]
Standard Hours = 2 hours/unit × 15,000 units = ? hours
Actual Hours = 32,000 hours
Standard Rate = $18/hour
What is 2,000 hours unfavorable?
Future-oriented information that differs among alternatives is called this.
What is relevant information?
This should be compared to avoidable fixed expenses when dropping a product line.
What is the contribution margin?
Setting up machines for 5,000 shirts is this level of activity.
What is a batch-level activity?
This formula measures the amount of income an investment center earns relative to the size of its assets
What is return on investment (ROI)?
The company used this many more pounds more than expected when producing 20,000 units at a standard of 5 pounds each. [Direct Materials Quantity Variance]
Standard Quantity Allowed = 5 lbs/unit × 20,000 units = ? lbs
Actual Quantity Used = 120,000 lbs
Standard Price = $1.50/lb
What is 20,000 pounds unfavorable?
This document lists all materials needed to make a product.
What is a bill of materials?
This cost would not be included in a cash budget.
What is depreciation expense?
With $120,000 in inspection costs and 10,000 inspections, the rate is this.
What is $12.00 per inspection?
Variable costing uses this income statement format.
What is Sales - Variable Costs = Contribution Margin - Fixed Costs = Net Income?
This is the amount the company saved per pound when you paid $1.50 instead of the $1.65 standard for 10,000 pounds. [Direct Materials Price Variance]
What is $1,500 favorable?
This document is used to accumulate job costs.
What is a job cost record?
[DM Budget] Calculate the direct materials to purchase for April given that:
- Production in April = 80,000 units
- Production in May = 70,000 units
- Each unit requires 5 ounces
- Beginning inventory of DM is 15,000 ounces
- Desired ending inventory = 10% of next month’s needs
What is 420,000 ounces?
April: 80,000 × 5 = 400,000 ounces need for prod.
Total Needs = 400,000 + 35,000 = 435,000 oz
DM to purchase = 435,000 − 15,000 = 420,000
This describes over-costing some products and under-costing others.
What is cost distortion?
If selling price = $16, variable cost = $10, and fixed cost = $135,000, breakeven units are this.
What is 22,500?
[Prod. Budget] Calculate the units to produce for January given that:
- Jan. budgeted units 70,000
- Feb. budgeted units 90,000
- The company wants to have 15% of next month’s predicted sales in units on had at the end of each month.
What is 73,000 units?
Total Needed = 70,000 + 13,500 = 83,500
Subtract Jan. beginning inventory = 83,500 − 10,500 = 73,000