Which of the following is not a feature or characteristic of managerial accounting?
A. Is sometime future oriented in nature.
B. Are created based upon a value added approach and not GAAP.
C. Made for external users.
D. Used as a basis for management to m
C. Made for external users
Which of the following is a characteristic of product cost?
A. It does not have overhead as one of its components.
B. It is a cost that is always recognized as an asset.
C. It is a cost directly associated with the product being produced or sold.
D. It is
C. It is a cost directly associated with the product being produced or sold.
Which of the following is a characteristic of period cost?
A. Period costs are recognized (expensed) in the period in which they are incurred.
B. Period costs are a component of product cost.
C. Period costs are product expenses recorded as an asset.
D. N
A. Period costs are recognized (expensed) in the period in which they are incurred.
What are examples of product costs?
Materials, COGS, Factory Depreciation
What are examples of period costs?
Rent, Salaries, Marketing
Define Cost Behavior:
-is how costs behave relative to a business' activity level.
-is used by management and employees to make business decisions.
-can be fixed, variable, or mixed.
Define Total Fixed Cost behavior:
-remains constant when activity increases.
-remains constant when activity decreases.
Fixed Cost Per Unit Behavior:
decreases when activity increases.
Total Variable Cost Behavior:
decreases proportionately when activity decreases.
Variable Cost Per Unit Behavior:
-remains constant when activity increases.
-remains constant when activity decreases.
Relevant revenue or costs:
differ from existing revenue or costs and are future oriented.
Sunk cost are always relevant. True or False?
False
Relevant information must be 100% accurate in order to be truly relevant. True or False?
False
The first step for special order decisions is to determine
the relevant revenue
For outsourcing decisions, the first step is to determine the relevant revenues. True or False?
False
Strategic planning...
involves making long-term decisions such as defining the scope of the business, determining which products to develop or discounting, and identifying the most profitable markets.
Preparing the master budget begins with...
the sales forecast
The inventory purchases budget...
shows the amount of inventory a company must purchase each month to satisfy the demand projected in the sales budget.
Which of the following is not an advantage of budgeting?
Precision
Select the correct equation format for the purchases budget.
Expected sales + desired ending inventory - beginning inventory = required purchases.
Taxable income...
is the amount of income that can legally be taxed (tax base).
A marginal tax rate is:
the base is divided into a series of monetary amounts, or brackets, a subset (or portion) of the tax base subject to a specific tax rate.
An effective tax rate is:
the taxpayer's average rate of taxation on each dollar of total income (both taxable and non-taxable).
The effective tax rate formula is...
total tax/total income
Horizontal equity is:
When two taxpayers in similar situations pay the same tax.