ACC 303: Chapter 4 and 5

A cost that contains both variable and fixed costs elements is called a(n) ____________ cost.

mixed

Three activities vital to the role of managerial accounting are:

planning, controlling and decision making

On a traditional income statement, cost of goods sold reports the _________ costs attached to merchandise sold during the period, while selling and administrative expenses report all __________ costs that have been expensed as incurred.

product period

financial accounting

provides data to external users.

Managerial accounting

provides financial data for internal use

What is usually the major source of receipts in the receipts section of the cash budget?

sales

nonmanufacturing costs

selling costs and administrative costs

Variable selling and administrative expenses are calculated by multiplying the budgeted units ______ by the variable selling and administrative expense per unit.

sold

A game plan that enables a company to attract customers by distinguishing itself from competitors is a(n) __________

strategy

Direct material

when used in production, their costs are transferred from raw materials to work in process

Differential costs are also known as ___________ costs.

Incremental

Which of the following budgets are needed to calculate unit product costs?

Manufacturing overhead Direct materials Direct labor

What is subtracted from total budgeted selling and administrative expenses to determine the cash disbursements for selling and administrative expenses?

Non-cash expenses

Manufacturers product cost flow through 3 inventory accounts on the balance sheet:

Raw materials, work in process, finished goods

Period costs are expensed when incurred.

True

Perhaps the most basic managerial skill is the ability to ______.

make intelligent decisions

The calculation of unit product cost requires information from the ___________ budget

manufacturing overhead

Management's detailed plans for the future are often expressed formally in a(n) ____________.

Budget

Conversion cost

Direct Labor + Manufacturing Overhead

Prime cost

Direct Materials + Direct Labor

Direct cost

a cost that can be easily and conveniently traced to a specified cost object

Indirect cost

a cost that cannot be easily and conveniently traced to a specified cost object

Fixed cost

a cost that does not change, no matter how much of a good is produced. It stays constant regardless of level of activity

Variable cost

a cost that rises or falls depending on how much is produced. Must be with respect to something (its activity base)

Required borrowings on a cash budget is calculated by ________

adding the desired ending cash balance to the amount of the cash deficiency

Period costs

are all the costs that are not product costs. All selling and adminstrative expenses are treated like period costs.

The receipts, disbursements, excess or deficiency, and financing section are all parts of the _________ budget

cash

Finished goods

consist of completed units of product that have not been sold to customers

Direct labor

consists of labor costs that can be easily traced to individual units of product. Sometimes called touch labor.

Work in process

consists of units of production that are only partially complete and will require further work before they are ready for sale to customers

Direct labor and manufacturing overhead

costs are added to work in process to convert direct materials into finished goods

The essence of strategy are _________ __________ propositions.

customer value

Manufacturing costs

direct materials, direct labor, and manufacturing overhead

The section on the cash budget that summarizes all cash payments that are planned for the budget period is the cash ___________

disbursement

A performance report ______.

helps identify and eliminate sources of unsatisfactory performance can be used to help evaluate and reward employees

Raw materials

include any materials that go into the final product

Product cost

includes all costs involved in acquiring or making a product.

Manufacturing overhead

includes all manufacturing costs except direct materials and direct labor.

A company's planned net profit that serves as a benchmark against which subsequent company performance can be measured is shown on the budgeted ______________ _____________

income statement

Product costs are also called _________ costs.

inventoriable