Managerial Accounting: Chapters 8, 9, and 10 Review

Vocabulary practice flashcards covering short-term decision making, budgeting, decentralization, performance measurement, and responsibility accounting from Chapters 8, 9, and 10.

What is relevant information

expected future data and differs among alternatives

what costing approach do price-takers emphasize

target costing

what costing approach do price setters emphasize

cost-plus pricing

if the revenue from the special order exceeds the incremental costs of filling the order, what decision should we make

reject the special order

what are avoidable fixed costs

fixed costs that can be eliminated as a result of discontinuing a product

what are unavoidable fixed costs

fixed costs that will continue to be incurred even if the product line is discontinued

when should we outsource

when the incremental costs of making exceed the incremental costs of outsourcing

when should we process further

when the incremental revenue from processing further exceeds extra cost of processing further

what costs do we not include in our decisions

sunk costs

which of the following was not a takeaway from our AI budgeting activity?

Budgets are based on actual results

what is participative budgeting

involves participation of many levels of management

which of the following is not a benefit of budgeting

communication, planning, benchmarking

what is saftey stock when it comes to the production budget

inventory kept on hand in case demand is higher than predicted

which of the following is a type of budget

sales, production, dm, dl

which of the following is a financial budget

capital expenditures, cash collections, cash payments, combined cash budget

what function do we use in excel for sensitivity analysis

what if

why are flexible budgets prepared

to prepare for different volumes of activity

why are flexible budgets prepared

to prepare for different volumes of activity

how are budgets used

to control, develop strategy, and to act

what is zero based budgeting

managers begin with 0 budget and must justify every dollar

what is decentralization

when decision making authority is pused downward

what is the principle of controllability

evaluate managers based on the decisions and outcomes they can influence

what is goal congruence

when the goals of the segment managers align with the goals of top management

what is a cost center

responsibility center in which managers are accountable for costs only

what is true about unfavorable variances

they are a signal to investigate

what two measures make up ROI

sales margin and capital turnover

what is the short cut equation for ROI

operating income/ total assets

what is the equation for sales margin

operating income/ sales

what is the eqution for capital turnover

sales/ total assets

which of the following are perspecitves of the balanced scorecard

financial, customer, learning and grwoth, and internal business