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MA Final
Management Accounting Final Exam
| Term | Definition |
|---|---|
| Sales budget | A detailed schedule showing the expected sales for the budget period |
| If sales budget is inaccurate | Then the rest of the budget will be inaccurate |
| Production budget | Defines how many units need to be produced during the budget period |
| Sales budget | Influences the variable portion of the selling and administrative expense budget |
| Production budget | Used to determine the direct material, direct labor, and manufacturing overhead budgets |
| Cash budget | Influenced by information from sales budget, selling and administrative expense budget, and the manufacturing cost budgets |
| Cash budget | Detailed plan showing how cash resources will be acquired and used |
| Budgeted income statement | Provides an estimate of net income for the budget period |
| Budgeted income statement | Relies on information from the sales budget, ending finished goods inventory budget, selling and administrative expense budget, and the cash budget |
| Bugeted balance sheet | Estimates the company's assets, liabilities, and stockholders' equity at the end of a budget period |
| 4 components of cash budget | Cash receipts section, cash disbursements section, cash excess or deficiency section, financing section |
| Static planning budget | Prepared before the period begins and is valid for only the planned level of activity |
| Flexible budget | Estimate of what revenues and costs should have been, given the actual level of activity for the period |
| Flexible budget | Prepared for any activity level in the relevant range |
| Price standards | Specify how much should be paid for each unit of the input |
| Quantity standards | Specify how much of an input should be used to make a product or provide a service |
| Standard quantity per unit | Defines the amount of direct materials that should be used for for each unit of finished product, including allowance for normal inefficiencies, such as scrap and spoilage |
| Standard price per unit | Defines the price that should be paid for each unit of direct materials and should reflect the final, delivered cost of those materials. |
| Standard rate per hour | Defines the company's expected direct labor wage rate per hour, including employment taxes and fringe benefits |
| Standard hours per unit | Defines the amount of direct labor-hours that should be used to produce one unit of finished goods |
| Standard hours per unit | Use time and motion studies for each labor operation, actually clocking the time required for each task |
| Standard cost per unit | Product of standard quantity and standard price |
| Standard cost per unit | Product of standard hours and standard rate |
| Factor that affect material price variance | Rush order |
| Factor that affect material quantity variance | Poorly trained workers, low quality material |
| Factor that affect labor rate variance | Mix of employee skill levels |
| Factor that affect efficiency variance | Employee motivation |
| Relevant costs | Differential costs, incremental costs, avoidable costs, and depreciation expense costs are always this cost |
| Avoidable cost | Cost that can be avoided or eliminated by choosing one alternative over another |
| Sunk cost | Are always irrelevant costs when choosing among alternatives |
| Unavoidable costs | Are irrelevant costs |
| Sunk cost | Cost already incurred and cannot be chanegd regardless of which alternative is chosen so therefore is irrelevant |
| Irrelevant cost | Future costs that do not differ between alternatives are always this cost. |
| Contraint resource | If company has it, company would make the most profit if it manufactures the product that generates the highest contribution margin per it |
| Product line | Should only be drop if the profit increases without it |
| Product cost | Includes direct materials, direct labor, manufacturing overhead |
| Period costs | Includes selling and administrative costs |
| Product cost | Includes all the costs that are involved in acquiring or making a product |
| Process costing | Company produces many units of a single product |
| Process costing | One unit of product is indistinguishable from other units of product |
| Process costing | The identical nature of each unit of product enables assigning the same average cost per unit |
| Job-order costing | Many different products are produced each period |
| Job-order costing | Products are manufactured to order |
| Job-order costing | The unique nature of each order requires tracing or allocating costs to each job, and mainting cost records for each job |
| Variable costing | Product costs includes direct materials, direct labor, variable manufacturing overhead |
| Variable costing | Period costs includes fixed manufacturing overhead, variable selling and administrative expenses, and fixed selling and administrative expenses |
| Absorprtion costing | Product costs includes direct materials, direct labor, variable manufacturing overhead, fixed manufacturing overhead |
| Absorption costing | Period costs includes variable selling and administrative expenses, and fixed selling and administrative expenses |
| Absorption costing | Produces highest values for work in process and finished goods inventories |
Created by:
ltt
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