Accounting Exam 3
Rolling budget
A budget that adds a new month when the current month ends is called a...
Absorption will be greater than variable costing
If production exceeds sales....
Variable will be greater than absorption costing
If sales exceed production...
period expense
In variable costing fixed OH are expensed as what
Static Budget
Prepared 1 time a year for 1 activity level
Absorbtion Costing
Required under GAAP, includes fixed OH
Direct materials, direct labor, and variable sellin and administrative costs
Under absorption costing, which of the following costs would be included in finished goods inventory
wages of machine operators, steel costs for machine tool manufacturer
Under variable costing which of the followig would be included in finished goods inventory
Normal Standards
allow for rest periods, machine breakdowns, and setup time
Variances
differences between actual and standard prices orquantities
Standard cost
expected cost per unit
Ideal Standards
represent optimum levels of performance under perfect operating conditions
Continuous Budget
12 month rolling
Flexible
A series of budgets for varying levels of activity is termed a_____ budget
Direct Costing
Another name for variable costing is
Variable Costing
Does not included fixed OH
Equal units sold
The amount of income under absorption costing will equal the amount of income under variable costing when units manufactured
Sales
The first budget customarily prepared as part of an entitiys master budget is...
Depreciation expense
Which of the following should be ignored when preparing the cash budget
depreciation expense on factory building
Which of the following would be included in the cost of a product manufactured according to absorption costing
Direct materials
Which of the following would be included in the cost of a product manufactured according to variable costing
Wages of factory workers
Which of the following would not be included in a company's selling and administrative expense budget