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Study sets matching "managerial accounting chapter 8"

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Study sets matching "managerial accounting chapter 8"

12 terms
Managerial Accounting Chapter 8
Absorption Costing
Byproducts
Direct Costing
Full Costing
A product costing method that allocates all manufacturing... cos…
Products produced from a joint manufacturing process that hav…
A product costing method that allocates only variable manufac…
A product costing method that allocates all manufacturing cos…
Absorption Costing
A product costing method that allocates all manufacturing... cos…
Byproducts
Products produced from a joint manufacturing process that hav…
26 terms
Managerial Accounting Chapter 8
Budget
Cash budget
Continuous budget
Control
A detailed plan for the acquisition and use of financial and…
A detailed plan showing how cash resources will be acquired a…
A 12-month budget that rolls forward one month as the current…
Those steps taken by management that attempt to increase the…
Budget
A detailed plan for the acquisition and use of financial and…
Cash budget
A detailed plan showing how cash resources will be acquired a…
18 terms
Managerial Accounting Chapter 8
Budget
Cash Budget
Continuous Budget
Control
A detailed plan for the future that is usually expressed in f…
A detailed plan showing how cash resources will be acquired a…
A 12-month budget that rolls forward one month as the current…
The process of gathering feedback to ensure that a plan is be…
Budget
A detailed plan for the future that is usually expressed in f…
Cash Budget
A detailed plan showing how cash resources will be acquired a…
17 terms
Managerial Accounting Chapter 8
Budget
Budget Committee
Cash Budget
Continuous Budget (aka Perpetual Budget)
A detailed plan for the future that is usually expressed in f…
A group of key managers who are responsible for overall budge…
A detailed plan showing how cash resources will be acquired a…
A 12 month budget that rolls forward one month as the current…
Budget
A detailed plan for the future that is usually expressed in f…
Budget Committee
A group of key managers who are responsible for overall budge…
22 terms
Chapter 8: Managerial Accounting
The standards that allow for no machin…
To measure controllable production ine…
Which of the following statements conc…
If a company follows a practice of iso…
c
c
c
b
The standards that allow for no machin…
c
To measure controllable production ine…
c
28 terms
Managerial Accounting chapter 8
planning
directing/leading
controlling
strategic plan
is the future-oriented part of the planning and control cycle…
is the implementation or action phase of the cycle, when mana…
is the backward-looking part of the cycle, when managers look…
the starting point of the planning process. Is the managers v…
planning
is the future-oriented part of the planning and control cycle…
directing/leading
is the implementation or action phase of the cycle, when mana…
14 terms
Managerial Accounting Chapter 8
avoidable fixed costs
contraint
contract manufacturers
cost-plus pricing
fixed costs that can be eliminated as a result taking a parti…
a factor that restricts production of sale of a product
manufacturers who make products for other companies, not for…
an approach to pricing used by price-setters; cost-plus prici…
avoidable fixed costs
fixed costs that can be eliminated as a result taking a parti…
contraint
a factor that restricts production of sale of a product
28 terms
Managerial Accounting Chapter 8
Define relevant information
What are the two characteristics of in…
Define irrelevant costs
What are sunk costs? Are they consider…
Costs and revenues that are relevant to decisions made by man…
1: Relevant information is expected future data... 2: Relevant i…
Costs that do not affect your decision
-Costs that are irrelevant to your decision... -Costs that were…
Define relevant information
Costs and revenues that are relevant to decisions made by man…
What are the two characteristics of in…
1: Relevant information is expected future data... 2: Relevant i…
7 terms
Chapter 8 Managerial Cost Accounting
Equivalent Units
Weighted Average Process Costing
First In, First Out (FIFO) process cos…
Production Cost Reporting
Number of complete physical units to which units in inventori…
Inventory method that for product costing purposes combines c…
Inventory method whereby the first goods received are the fir…
Report that summarizes production and cost results for a peri…
Equivalent Units
Number of complete physical units to which units in inventori…
Weighted Average Process Costing
Inventory method that for product costing purposes combines c…
18 terms
Managerial Accounting Chapter 8
What is the definition of time value o…
Rate of return is synonymous with what…
A series of equal amounts to be receiv…
What are the two methods for consideri…
A dollar on hand today is worth more than a dollar to be rece…
Interest Rate
Ordinary Annuities
Net Present Value Method (NPV) or Internal Rate of Return Met…
What is the definition of time value o…
A dollar on hand today is worth more than a dollar to be rece…
Rate of return is synonymous with what…
Interest Rate
28 terms
Managerial Accounting Chapter 8
Avoidable Fixed Costs
Common Fixed Expense
Constraint
Contract Manufacturers
Fixed costs that can be eliminated as a result of taking a pa…
Expense that can not be traced to a particular product line
A factor that restricts the production or sale of a product
Manufacturers that make products for other companies, not for…
Avoidable Fixed Costs
Fixed costs that can be eliminated as a result of taking a pa…
Common Fixed Expense
Expense that can not be traced to a particular product line
26 terms
Managerial Accounting Chapter 8
Relevant information
Irrelevant information
Relevant Nonfinancial Information
Six Short-Term Special Decisions
Expected future (cost and revenue) data.... Differs among altern…
Costs that do not differ between alternatives.... Sunk costs - i…
Nonfinancial, or qualitative factors, also play a role in man…
-Special sales orders ... -Pricing ... -Discontinuing products, dep…
Relevant information
Expected future (cost and revenue) data.... Differs among altern…
Irrelevant information
Costs that do not differ between alternatives.... Sunk costs - i…
15 terms
Braun & Tietz Managerial Accounting: Chapter 8
Avoidable fixed costs
Common fixed expenses
Constraint
Contract manufacturers
Fixed costs that can be eliminated as a result of taking a pa…
Expenses that can not be traced to a particular product line
A factor that restricts the production or sale of a product
Manufacturers that make products for other companies, not for…
Avoidable fixed costs
Fixed costs that can be eliminated as a result of taking a pa…
Common fixed expenses
Expenses that can not be traced to a particular product line
13 terms
Financial & Managerial Accounting Chapter 8
account receivable
accounts receivable turnover
aging the receivables
Allowance for Doubtful Accounts
A claim against the customer created by selling merchandise o…
The relationship between net sales and accounts receivable, c…
The process of analyzing the accounts receivable and classify…
The contra asset account for accounts receivable.
account receivable
A claim against the customer created by selling merchandise o…
accounts receivable turnover
The relationship between net sales and accounts receivable, c…
8 terms
Chapter 8 Managerial Accounting
Relevant Information
Avoidable Cost
Unavoidable Cost
Sunk Cost
Differs between alternatives; happens in the future.
Relevant
Not relevant
Happened in the past; not relevant
Relevant Information
Differs between alternatives; happens in the future.
Avoidable Cost
Relevant
9 terms
Chapter 8 Managerial Accounting
Capital Budget
Operating Budget
Zero Based Budget
Minimum Level Budget
a long-term budget, mostly for buying property, plant and equ…
Short term, a year or less, coordinates daily operations
budget levels start at 0, done every 5 years or when there is…
A base is established for your committed costs, all expenditu…
Capital Budget
a long-term budget, mostly for buying property, plant and equ…
Operating Budget
Short term, a year or less, coordinates daily operations
11 terms
Managerial Accounting Chapter 8
Standard Amount
Actual Amount
Variance
Revenue (Expense) Variance
Is the amount management expects to exist. Companies establis…
Is the amount that did, in fact, exist. Companies identify ma…
Is the difference between a standard amount and an actual amo…
Is favorable if it represents an increase in income and unfav…
Standard Amount
Is the amount management expects to exist. Companies establis…
Actual Amount
Is the amount that did, in fact, exist. Companies identify ma…
16 terms
Managerial Accounting Chapter 8
Budget
Cash Budget
Continuous Budget or Perpetual Budget
Control
A detailed plan for the future that is usually expressed in f…
A detailed plan showing how cash resources will be acquired a…
A 12 month budget that rolls forward one month as the current…
The process of gathering feedback to ensure that a plan is be…
Budget
A detailed plan for the future that is usually expressed in f…
Cash Budget
A detailed plan showing how cash resources will be acquired a…
9 terms
Managerial Accounting Chapter 8
Budget
Used for Two Distinct Purposes
Planning
Control
a detailed plan for the future that is usually expressed in f…
planning and control.
involves developing goals and preparing various budgets to ac…
involves gathering feedback to ensure that the plan is being…
Budget
a detailed plan for the future that is usually expressed in f…
Used for Two Distinct Purposes
planning and control.
12 terms
Chapter 8 Managerial Accounting
List of documents that would be part o…
Sales Budget
Production Budget
Inventory Purchases
1. Sales Budget, including a schedule of expected cash collec…
Budgeted Sales... Selling Price... Total Sales... %of Sales in the co…
Budgeted unit sales... +Desired ending inventory of finished goo…
Budgeted COGS... +Desired ending merchandise inventory... Total nee…
List of documents that would be part o…
1. Sales Budget, including a schedule of expected cash collec…
Sales Budget
Budgeted Sales... Selling Price... Total Sales... %of Sales in the co…
15 terms
Managerial Accounting - Chapter 8
relevant information
sunk costs
target costing
cost plus pricing
expected future data that differs among alternatives
a cost that has already been incurred
an approach to pricing used by price takers; target costing b…
a pricing approach in which the company adds a desired level…
relevant information
expected future data that differs among alternatives
sunk costs
a cost that has already been incurred
15 terms
Chapter 8 Managerial Accounting
avoidable fixed costs
common fixed expenses
constraint
contract manufacturers
fixed costs that can be eliminated as a result of taking a pa…
expenses that can not be traced to a particular product line
a factor that restricts the production or sale of a product
manufacturers that make products for other companies, not for…
avoidable fixed costs
fixed costs that can be eliminated as a result of taking a pa…
common fixed expenses
expenses that can not be traced to a particular product line
18 terms
Managerial Accounting chapter 8
Budget
Cash Budget
Continous Budget
Control
A detailed plan for the future that is usually expressed in f…
A detailed plan showing how cash resources will be acquired a…
A 12-month budget that rolls forward one month as the current…
The process of gathering feedback to ensure that a plan is be…
Budget
A detailed plan for the future that is usually expressed in f…
Cash Budget
A detailed plan showing how cash resources will be acquired a…
16 terms
Managerial Accounting Chapter 8
Present Value =
An even stream of cash flows (same amo…
Capital Budgeting
Screening Decision
(Future Value)/(1 + Discount Rate)^(compounding periods)
Annuity
Planning related to long-term investments
Does a proposed project meet some preset or standard of accep…
Present Value =
(Future Value)/(1 + Discount Rate)^(compounding periods)
An even stream of cash flows (same amo…
Annuity
14 terms
Managerial Accounting Chapter 8
Absorption costing
Carrying costs
Common fixed expenses
Direct fixed expenses
Assigns ALL manufacturing costs to the product. Direct Materi…
The costs of keeping and storing inventory.
jointly caused by two or more segments. These expenses persis…
fixed expenses that are directly traceable to a segment. They…
Absorption costing
Assigns ALL manufacturing costs to the product. Direct Materi…
Carrying costs
The costs of keeping and storing inventory.
14 terms
Managerial Accounting Chapter 8
Budget reconciliation report
Favorable variance
Fixed cost spending variance
Flexible budget
A report that uses variances to reconcile the difference betw…
A difference between an actual result and a budgeted amount t…
The difference between budgeted fixed costs and actual fixed…
A budget made for the actual level of sales, retaining all ot…
Budget reconciliation report
A report that uses variances to reconcile the difference betw…
Favorable variance
A difference between an actual result and a budgeted amount t…
53 terms
Managerial Accounting chapter 8
budget
two purposes of budgets
planning
control
a detailed plan for the future that is usually expressed in f…
planning and controlling
involves developing goals and preparing various budgets to ac…
involves gathering feedback to ensure that the plan is being…
budget
a detailed plan for the future that is usually expressed in f…
two purposes of budgets
planning and controlling
14 terms
Managerial Accounting Chapter 8
avoidable fixed costs
common fixed expenses
constraint
contract manufacturers
fixed costs that can be eliminated as a result of taking a pa…
expenses that can not be traced to a particular product line
a factor that restricts the production or sale of a product
manufacturers that make products for other companies, not for…
avoidable fixed costs
fixed costs that can be eliminated as a result of taking a pa…
common fixed expenses
expenses that can not be traced to a particular product line
14 terms
Chapter 8 Managerial Accounting
2 approaches to costing
absorption
variable (direct)
variable
1) Absorption... 2) Variable
under this type of costing, both variable and fixed MOH costs…
under this type of costing, only variable MOH is applied to W…
when units produced does NOT EQUAL units sold, always use ___…
2 approaches to costing
1) Absorption... 2) Variable
absorption
under this type of costing, both variable and fixed MOH costs…
19 terms
Managerial Accounting Chapter 8
Zero-Based Budgeting
Incremental Budgeting
Participative or Self-Imposed Budgeting
Budget Slack
Budgeting that requires management to justify every dollar in…
Standard budgeting mode. Looks a t prior years budget as a ba…
Managers are responsible for preparing budgets for areas unde…
Occurs when individuals intentionally pad the budget by under…
Zero-Based Budgeting
Budgeting that requires management to justify every dollar in…
Incremental Budgeting
Standard budgeting mode. Looks a t prior years budget as a ba…
24 terms
Chapter 8 managerial accounting
Budgeting
budget committee
cash budget
continuous budget(perpetual budget)
a detailed plan for the future that is usually expressed in f…
a group of key managers who are responsible for overall budge…
a detailed plan showing how cash resources will be acquired a…
12-month budget that rolls forward one month as the current m…
Budgeting
a detailed plan for the future that is usually expressed in f…
budget committee
a group of key managers who are responsible for overall budge…
24 terms
Chapter 8 Managerial Accounting
budget
continuous/ perpetual budgeting
self impose/ participative budget
budgetary slack
a detailed plan for the future that is usually expressed in f…
a 12-month budget that rolls forward one month as the current…
a budget that is prepared with the full cooperation and parti…
making a budget that is easily attainable
budget
a detailed plan for the future that is usually expressed in f…
continuous/ perpetual budgeting
a 12-month budget that rolls forward one month as the current…
21 terms
Chapter 8: Managerial Accounting
Budget
Planning
Control
Advantages of Budgeting
A quantitative plan for acquiring and using resources over a…
Developing goals and preparing various budgets to achieve tho…
Steps taken by management to increase the likelihood that all…
1. Communicate management's plans throughout the organization…
Budget
A quantitative plan for acquiring and using resources over a…
Planning
Developing goals and preparing various budgets to achieve tho…
20 terms
Managerial Accounting - Chapter 8
Benchmarking
Budget report
Budgetary control
Controllable variance
Practice of comparing and analyzing company financial perform…
Report comparing actual results to planned objectives; someti…
Management use of budgets to monitor and control company oper…
Combination of both overhead spending variances (variable and…
Benchmarking
Practice of comparing and analyzing company financial perform…
Budget report
Report comparing actual results to planned objectives; someti…
9 terms
Chapter 8 Managerial Accounting
budget
Planning
Control
budgets
calculated plan for acquiring and using financial and other r…
includes developing future objectives and preparing various d…
involves the steps taken by management to attain the objectiv…
communicate managements plans throughout the organization... for…
budget
calculated plan for acquiring and using financial and other r…
Planning
includes developing future objectives and preparing various d…
11 terms
Managerial Accounting Chapter 8
Value Chain
Value chains level
Virtual intergration
Marginal Revenue
Is the set of value-producing activities that stretches from…
first level:Business entitles... Second level: Processes... Third L…
term used to describe the use of the Internet to replace phys…
the additional income from selling one more unit of a good; s…
Value Chain
Is the set of value-producing activities that stretches from…
Value chains level
first level:Business entitles... Second level: Processes... Third L…
26 terms
Managerial Accounting Chapter 8
favorable profit variance
unfavorable profit variance
favorable revenue variance
unfavorable revenue variance
a variance that occurs when actual profit exceeds budgeted pr…
a variance that occurs when actual profit falls below budgete…
a variance that occurs when actual revenue exceeds budgeted r…
a variance that occurs when actual revenue falls below budget…
favorable profit variance
a variance that occurs when actual profit exceeds budgeted pr…
unfavorable profit variance
a variance that occurs when actual profit falls below budgete…
27 terms
Managerial Accounting: Chapter 8
Planning and Control Cycle
Strategic Plan
Long-Term Objective
Short-Term Objective
Planning: Future oriented part of the planning and control cy…
The starting point of the planning process is managers' strat…
A long-term objective is a specific goal that managers want t…
A short-term objective is a specific goal that managers need…
Planning and Control Cycle
Planning: Future oriented part of the planning and control cy…
Strategic Plan
The starting point of the planning process is managers' strat…
10 terms
Managerial Accounting Chapter 8
Hubbart Formula Equation
Before-Tax Net Income Formula
Steps of the Hubbart Formula
Hotels Required ADR Equation
net income + taxes + nonoperating expenses + undistributed op…
after-tax net income (ROI) / 1.00 - tax rate
1. calculate before tax net income ... 2. calculate estimated no…
estimated rooms department revenues / estimated number of roo…
Hubbart Formula Equation
net income + taxes + nonoperating expenses + undistributed op…
Before-Tax Net Income Formula
after-tax net income (ROI) / 1.00 - tax rate
11 terms
Managerial Accounting Chapter 8
Flexible Budget
Sales Volume Variance
Sales Price Variance
Standard Price
-What if scenario ... Actuals x Estimated price
Difference between static budget and flexible budget based on…
-Actual sales price differing from standard sales price... -Diff…
Estimates of the expected sales price and per-unit costs
Flexible Budget
-What if scenario ... Actuals x Estimated price
Sales Volume Variance
Difference between static budget and flexible budget based on…
16 terms
Managerial Accounting Chapter 8
Budget
Cash Budget
Control
Continuous Budget
A detailed plan for the future that is usually expressed in f…
A detailed plan showing how cash resources will be acquired a…
The process of gathering feedback to ensure that a plan is be…
A 12-month budget that rolls forward one month as the current…
Budget
A detailed plan for the future that is usually expressed in f…
Cash Budget
A detailed plan showing how cash resources will be acquired a…
18 terms
Managerial Accounting chapter 8
Relevant information
Irrelevant information
Six short-term special decisions
Special order
expected future (costs and revenue) data, differs among alter…
costs that do not differ between alternatives, sunk costs: co…
special sales order, discontinuing products, product mix, pri…
customer requests a one-time order at a reduced sales price,…
Relevant information
expected future (costs and revenue) data, differs among alter…
Irrelevant information
costs that do not differ between alternatives, sunk costs: co…
9 terms
Managerial Accounting: Chapter 8
Room Rate Economics
Rack Rate
Room Mix
Seasonal Rate
When the supply of the hotel room is held constant, an increa…
The price which a hotel sells it's room when no discounts of…
A variety of room types
Offered during that hotel's highest volume season which is hi…
Room Rate Economics
When the supply of the hotel room is held constant, an increa…
Rack Rate
The price which a hotel sells it's room when no discounts of…
Managerial Accounting Chapter 8
What is a budget? What is budgetary co…
Discuss some of the major benefits to…
What is meant by the term responsibili…
What is a master budget? Briefly descr…
Budget is a detailed plan for the future, quantitative plan f…
Some of the benefits of budgeting-... A. Communicates management…
Responsibility accounting- a manager is held responsible for…
Master budget- composed of smaller budgets: sales/cash receip…
What is a budget? What is budgetary co…
Budget is a detailed plan for the future, quantitative plan f…
Discuss some of the major benefits to…
Some of the benefits of budgeting-... A. Communicates management…
9 terms
Managerial Accounting Chapter 8
Static budgets
What is wrong with a static budgtet
Flexible budgets
Standard Costs
The official operating budget for the year that results from…
The static budget is appropriate for the budgeted level of ac…
To plan and control spending, management adjusts the variable…
Relate to the budgets (for a manufacturer) discussed in Chapt…
Static budgets
The official operating budget for the year that results from…
What is wrong with a static budgtet
The static budget is appropriate for the budgeted level of ac…
Managerial Accounting Chapter 8
Planning (Static) budget
Flexible budget
How to prepare a flexible budget
Revenue variance:
Planning budgets are prepared for a single, planned level of…
Flexible budget may be prepared for any activity level in the…
Follow the cost formula. The total fixed cost is unchanged wi…
Flexible budget revenue versus Actual revenue... F= Favorable va…
Planning (Static) budget
Planning budgets are prepared for a single, planned level of…
Flexible budget
Flexible budget may be prepared for any activity level in the…
17 terms
Master Budgeting Chapter 8 Managerial Accounting
Planning
Control
Budgets _________management's plans th…
Budget forces _________ to think about…
developing future objectives and preparing various detailed b…
involves the steps taken by management to attain the objectiv…
communicate
managers
Planning
developing future objectives and preparing various detailed b…
Control
involves the steps taken by management to attain the objectiv…
27 terms
Managerial Accounting Chapter 8: Budgets
Budget
Surplus
Deficit
1. Sales Budget Definition
How much money you receive, how money you spend, and how much…
When you receive more money than you spend
When you spend more money than you have
An educated guess of how much ice cream we are going to sel…
Budget
How much money you receive, how money you spend, and how much…
Surplus
When you receive more money than you spend
38 terms
MBA Managerial Accounting Chapter 8
Cost function
Assumption to estimate cost functions
Slope coefficients
Constant or intercept
A mathematical description of how a cost changes with changes…
1. Variations in the level of a single activity explain varia…
The amount by which total cost changes when a one unit change…
Is the component of total cost that does not vary with change…
Cost function
A mathematical description of how a cost changes with changes…
Assumption to estimate cost functions
1. Variations in the level of a single activity explain varia…
13 terms
Financial & Managerial Accounting Chapter 8
account receivable
accounts receivable turnover
aging the receivables
Allowance for Doubtful Accounts
A claim against the customer created by selling merchandise o…
The relationship between net sales and accounts receivable, c…
The process of analyzing the accounts receivable and classify…
The contra asset account for accounts receivable.
account receivable
A claim against the customer created by selling merchandise o…
accounts receivable turnover
The relationship between net sales and accounts receivable, c…
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