5 Written questions
5 Matching questions
- production volume variance
- cost driver
- Margin of safety percentage
- a variance that arises because the volume used to apply fixed overhead differs from the estimated volume used to estimate fixed costs per unit. also called "capacity variance", "idle capacity" or a "denominator variance"
- b difference between planned result and actual outcome. Uses this difference to evaluate the performance of individuals and business units and identify possible sources of deviations between budgeted and actual performance.
- c factor that causes, or "drives" an activity's costs
- d the excess of projected or actual sales over the break even volume expressed as a percentage of actual sales volume
- e operation where the work required limits production
5 Multiple choice questions
- exporting a product to another country at a price below domestic cost
- process that begins by attempting to increase price to meet reported product costs, losing demand, reporting still higher costs, and so on until the firm is out of business. Can begin in many ways, but easy to avoid.
- budget that indicates revenues, costs, and profits for different levels of activity, including the ex post actual activity level
- contribution margin per unit of a particular input with limited availability
- Either methods are acceptable for assigning costs to inventories and cost of goods sold. Weighted average has been criticized for masking current period costs. If computational and record keeping costs are about the same under both FIFO and weighted average, FIFO costing generally offers greater decision making benefits
5 True/False questions
Expense → exporting a product to another country at a price below domestic cost
Marketing and Administrative costs are treated like → production costs. Variable costs are expected to change as activity changes.
Job → unit of a product that is easily distinguishable from other units
Variable costing → has less detailed recordkeeping, so it is cheaper than job costing. But still does not provide as much information as job costing does. Job costing records the cost of each unit produced. the choice of process versus job costing system involves a comparison of the costs and benefits of each system as well as the production process being utilized.
flexible production budget → is the first step in the budgetary planning and control cycle. The budgeting process provides a means to coordinate activities among units of the organization, to communicate the organization's goals to individual units, and to ensure that adequate resources are available to carry out the planned activities.