Managerial Accounting Flashcards: Budgetary Control & Variance Analysis

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Finance - Personal Finance

georgepetenjk Created by 10 mon ago

Cards in this deck(45)

Budgetary control involves developing the budget, analyzing the difference between actual and budget, and taking _____ action.

When developing a flexible budget, management must perform the step of identifying the _____ index and relevant range of activity.

Budget reports should be prepared _____ as needed to ensure effective financial management.

If costs are not responsive to changes in activity level, they are called _____ costs.

A static budget is appropriate for _____ overhead costs.

The primary difference between a static budget and a flexible budget is that a static budget is prepared for a single level of activity, while a flexible budget is adjusted for _____ activity levels.

A flexible budget projects budget data for _____ levels of activity.

Management by exception means that _____ differences will be investigated.

Under management by exception, which differences between planned and actual results should be investigated? They should be _____ and controllable.

A cost is considered controllable at a given level of managerial responsibility if the manager has the power to _____ the cost within a given time period.

A responsibility report should show only those costs that a manager can _____ .

An investment center incurs costs, generates revenue, and controls _____ funds.

A cost center is a part of an organization that incurs _____ .

A profit center incurs costs and generates _____ .

The maintenance department of a manufacturing company is a _____ center.

The linens department of a large department store is considered a _____ center.

Controllable margin is most useful for the performance evaluation of _____ centers.

The goal of residual income is to maximize the total amount of _____ income.

Residual income evaluates performance by comparing the return of an investment center with a company's _____ rate of return.

Accounting generally has the responsibility for expressing the budget in _____ terms.

A budget is an aid to _____ .

Budgets are useful in the planning process because they help communicate goals and provide a basis for _____ .

An unrealistic budget is more likely to result when it has been developed in a _____ down fashion.

Long-range planning encompasses a period of at least _____ years.

The last step in developing a master budget is preparing the budgeted _____ sheet.

A cash budget is not considered an _____ budget.

A manufacturing overhead budget is not a _____ budget.

Financial budgets include the cash budget and the budgeted _____ sheet.

The culmination of preparing operating budgets is the budgeted _____ statement.

A master budget consists of interrelated financial and _____ budgets.

The starting point in preparing a master budget is the preparation of the _____ budget.

The financing section of a cash budget is needed if there is a cash deficiency or if the ending cash balance is less than management's _____ required balance.

The single most important output in preparing financial budgets is the _____ budget.

Depreciation expense will never appear on a _____ budget.

What budget would be prepared for a manufacturer but not a merchandiser? The _____ labor budget.

Cost-volume-profit analysis is the study of the effects of changes in costs and volumes on a company's _____ .

A CVP income statement classifies costs as variable or fixed and computes the _____ margin.

Contribution margin is the amount of revenue remaining after deducting _____ costs.

Margin of safety in dollars is calculated as expected sales less _____ sales.

Margin of safety ratio is calculated as margin of safety in dollars divided by _____ sales.

In a sales mix situation, at any level of units sold, net income will be higher if more higher _____ margin units are sold than lower contribution margin units.

Sales mix refers to the relative percentage in which a company sells its _____ products.

Cost structure refers to the relative proportion of fixed versus _____ costs that a company incurs.

Reducing reliance on human workers and instead investing heavily in computers and online technology will reduce _____ costs and increase fixed costs.

The margin of safety ratio indicates what percent decline in sales could be sustained before the company would operate at a _____ .

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Managerial Accounting Flashcards: Budgetary Control & Variance Analysis

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