Markup Percentage =
#NAME?
Minimum Transfer Price =
#NAME?
Total Cost Per Unit =
#NAME?
Target Selling Price Per Unit =
#NAME?
Target Cost =
#NAME?
Target Cost =
#NAME?
When a division is operating at full capacity, and another division requests to buy some of its product, the minimum transfer price that the selling division will accept is computed by
adding variable costs and lost contribution margin per unit
Target cost related to price and profit means that
price and desired profit must be determined before costs
Target cost is computed by subtracting
desired profit from market price
Markup percentage =
[selling price - ( variable cost + fixed cost ) / total cost]
Cost-plus pricing means that...
Selling price = cost + (markup percentage x cost)
Desired ROI per unit =
0
Each of the following budgets is used in preparing the budgeted income statement...
sales budget, direct labor budget, and selling and administrative budget
Which of the following lists includes only financial budgets?
budgeted balance sheet, cash budget, and the capital expenditures budget
In most cases, not-for-profit entities...
begin the budgeting process by budgeting expenditures rather than receipts
The direct labor budget and the manufacturing overhead budget are prepared directly from the
production budget
Total Direct Labor Cost =
#NAME?
Ace Company monitors its managers' performance using a static budget. Which one of the following situations will provide the fairest evaluation for those managers?
when the company performs at the same activity level as the static budget level
Return on investment (ROI) =
#NAME?
For which of the following costs is a static budget most appropriate?
fixed overhead costs
What budgeted amounts appear on the flexible budget report?
budgeted amounts for the actual activity level achieved
A responsibility center that incurs costs and also generates revenues is a...
profit center
The accounting department of a manufacturing company is an example of...
a cost center
In a responsibility report for a profit center, controllable fixed costs are deducted from contribution margin to show...
controllable margin
Fixed costs that relate specifically to one center and are incurred for the sole benefit of that center are
direct fixed costs
Which of the following steps is not taken by management when developing a flexible budget?
identify the fixed costs and determine the budgeted fixed cost per unit
The formula for the production budget is budgeted sales in units plus...
desired ending finished goods units less beginning finished goods units
The formula for computing direct labor budget is to multiply the direct labor cost per hour by the...
total required direct labor hours
The budgeted income statement is...
the end product of the operating budgets
Budgetary control involves...
modifying future plans, analyzing differences, and determining differences between actual and planned results
Under responsibility accounting, the evaluation of a manager's performance is based on matters that the manager...
directly controls
Responsibility centers include...
cost centers, profit centers, and investment centers
Responsibility reports for cost centers...
include only controllable costs
To evaluate performance of a profit center manager, upper management needs detailed information about...
controllable costs and revenues