COB 242 Final JMU Browning

Financial accounting uses ______, while managerial accounting does not.

GAAP

Managerial accounting focuses more on _______, while financial accounting focuses on the entire entity.

subunits

Financial accounting uses _____ users, while managerial accounting does not.

external

Costs that are involved in acquiring or making a product.

Product Costs

Product costs include ___ ___, ___ ___, and ___ ___.

DM, DL, and MOH

Costs that are matched with the revenue of a specific time period and charged to expense as incurred.

Period Costs

Costs that vary with the quantity of output produced.

Variable Costs

Costs that do not vary with the quantity of output produced.

Fixed Costs

Costs that contain both a variable- and a fixed-cost element and change in total but not proportionately with changes in the activity level.

Mixed Costs

Costs of salaries, wages, and fringe benefits for personnel who work directly on the product.

Direct Labor

Costs of items that are used to make, and can be conveniently traced, to the finished product.

Direct Material

The three types of Manufacturing Overhead are ___, ___, and ___.

IM, IL, and other costs.

Materials used to support the production process. Examples include lubricants and cleaning supplies used in an automobile assembly plant.

Indirect Material

Cost of personnel who do not work directly on the product. Examples include maintenance workers, janitors, and security guards.

Indirect Labor

Variable costs increase ________ with activity.

proportionally

Variable costs represent the _______ of the function.

slope

Fixed costs represent the ______ of the function.

y-intercept

Variable cost per unit ____ over wide ranges of activity.

doesn't change

Fixed cost per unit goes ______ as activity level goes up.

down

The general cost equation is :

TC = F + V(X)

A factor, such as machine-hours, beds occupied, computer time, or flight-hours, that causes overhead costs.

Cost Driver

Both V and X in the general cost equations as it relates to the least-squares regressions line are _____.

estimates

The amount remaining from sales revenues after all variable expenses have been deducted.

Contribution Margin

The equation to find the contribution margin is ___.

Sales Revenue - Variable Costs

Direct material, direct labor, and manufacturing overhead all end up in the ___ inventory.

work in process

The WIP inventory eventually goes into ___ inventory.

finished goods

The finished goods inventory eventually becomes ____.

cost of goods sold

A rate used to charge manufacturing overhead cost to jobs that is established in advance for each period.

Predetermined Overhead Rate

The equation for predetermined overhead rate is ___.

Estimated MOH / Estimated Allocation Base

To find applied overhead, we must multiply the POhR by _____.

Cost Driver Activity

Actual overhead goes on the ___, applied overhead goes on the ___ of the MOH T-Account.

left, right

If there is leftover debit balance in the MOH T-Account, manufacturing overhead was _______.

underapplied

If there is leftover credit balance in the MOH T-Account, manufacturing overhead was _______.

overapplied

Both over and underapplied overhead are closed to _____.

COGS (application)

To close overhead, we are aiming to ____ the MOH account.

balance

Break even point is where ___ and ___ intercept on the cost-volume-profit graph.

revenue and TC

The equation to find target profit in units is ______.

(FC + Target Profit) / CM/Unit

The equation to find break even point in units is _____.

FC / CM/Unit.

A budget that estimates cash inflows and outflows during a particular period like a month or a quarter.

Cash Budget

A report showing estimates of what revenues and costs should have been, given the actual level of activity for the period.

Flexible Budget

A business segment whose manager has control over cost but has no control over revenue or investments in operating assets

Cost Center

The percentage of the total cost of purchasing an investment and the profit made from selling that investment.

Return on Investment

The equation for ROI is ___.

NOI / AOA

The net operating income that an investment center earns above the minimum required return on its operating assets.

Residual Income

The equation for residual income is ___.

NOI - (AOA * min required rate of return)

Two or more products that are produced from a common input.

Joint Products

A cost that should be considered when making decisions.

Relevant Costs

Costs that have no impact on a decision.

Irrelevant Costs

Cost of the next best alternative use of money, time, or resources when one choice is made rather than another.

Opportunity Cost

A cost that has already been committed and cannot be recovered.

Sunk Cost

The equation for gross margin % is ___.

(TR - COGS)/TR

The three corners of the fraud triangle are ___, ___, and ___.

Opportunity, Pressure, and Rationalization

When an current asset decreases from last year to this year, how is that figure portrayed on the statement of cash flows?

Positive (+)

When a current liability increases from last year to this year, how is that figure portrayed on the statement of cash flows?

Positive (+)

Cash flow activities that include (a) obtaining cash from issuing debt and repaying the amounts borrowed and (b) obtaining cash from stockholders, repurchasing shares, and paying dividends.

Financing Activities

Activities that increase or decrease the long-term assets available to the business; a section of the statement of cash flows.

Investing Activities

Cash flow activities that include the cash effects of transactions that create revenues and expenses and thus enter into the determination of net income.

Operating Activities

Repaying a loan is an example of which activity?

Financing

What is the first step in creating a statement of cash flows using the indirect method?

Add Net Income

What is the second step in creating a statement of cash flows?

Add Depreciation Expense

When an current asset increases from last year to this year, how is that figure portrayed on the statement of cash flows?

Negative (-)

When a current liability decreases from last year to this year, how is that figure portrayed on the statement of cash flows?

Negative (-)

The equation for inventory turnover is ___.

COGS / Average Inventory

The equation for price-earnings ratio is ___.

Share Price / Earnings per Share

How does a gain of sale on land affect the statement of cash flows?

Decrease (-)

How does a loss of sale on land affect the statement of cash flows?

Increase (+)

Borrowing cash from a creditor is an example of which activity:

Financing

Cash received from issuing stock is an example of which activity:

Financing

Paying dividends is an example of which activity:

Financing

Buying and selling plant, property, and equipment is an example of which activity:

Financing

Buying and selling stocks is an example of which activity:

Investing

Lending money is an example of which activity:

Investing

Collecting principle is an example of which activity:

Investing

Collecting cash is an example of which activity:

Operating

Paying suppliers for inventory is an example of which activity:

Operating

Paying employee compensation is an example of which activity:

Operating

Paying taxes is an example of which activity:

Operating

Paying interest to lenders is an example of which activity:

Operating

Repurchasing a firms own stock using cash is an example of which activity:

Financing

The equation for working capital is ___.

current assets - current liabilities.

The equation for current ratio is ___.

current assets / current liabilities

Issuing a bond payable is an example of what activity:

Financing

The equation for AR turnover is ___.

sales on account / average accounts receivable

The equation for the DuPont formula is ___.

net income / average stockholder's equity

Direct materials and direct labor are ___ costs.

Prime

When duties are segregated, the work of one employee can act as a ___________ on the work of another employee.

check

The primary purposes of internal control are to ____ assets and provide reliable ___ information.

safeguard, financial

Avoidable costs are always ___.

relevant

Unavoidable costs are always ___.

irrelevant

The equation for contribution margin ratio is ___.

CM / Sales

The equation of the variable expense per unit is ___.

Variable Expenses / Quantity Sold

The equation for operating leverage is ___.

CM / NOI

As the contribution margin increases, the break-even point ___.

decreases

The equation to find the amount of units to purchase is ___.

COGS + Beginning Inventory - Ending Inventory

When selling price changes, ___ changes.

variable cost

The cost of direct materials is ___ per unit but ___ in total.

fixed, variable

The equation for cost of goods manufactured is ______.

Beginning WIP + Total Manufacturing Costs - Ending WIP

The cost of direct materials are ____ per unit but ____ in total.

fixed, variable

Fixed cost per unit ____ as activity increases.

decreases

Discretionary Fixed Cost

Those fixed costs that arise from annual decisions by management to spend on certain fixed cost items, such as advertising and research.