WGU C253 Advanced Managerial Accounting 2024 final exam Question and Answers

WGU C253 Advanced Managerial Accounting 2024 final exam Question and Answers Absorption costing A costing method that includes all manufacturing costs—direct materials, direct labor, and both variable and fixed manufacturing overhead—in unit product costs. Activity An event that causes the consumption of overhead resources in an organization. Activity base A measure of whatever causes the incurrence of a variable cost. For example, the total cost of surgical gloves in a hospital will increase as the number of surgeries increases. Therefore, the number of surgeries is the activity base that explains the total cost of surgical gloves. Activity cost pool A "bucket" in which costs are accumulated that relate to a single activity measure in an activity-based costing system. Activity measure An allocation base in an activity-based costing system; ideally, a measure of the amount of activity that drives the costs in an activity cost pool. Activity variance The difference between a revenue or cost item in the flexible budget and the same item in the static planning budget. An activity variance is due solely to the difference between the actual level of activity used in the flexible budget and the level of activity assumed in the planning budget. Activity-based costing (ABC) A costing method based on activities that is designed to provide managers with cost information for strategic and other decisions that potentially affect capacity and therefore fixed as well as variable costs. Activity-based management (ABM) A management approach that focuses on managing activities as a way of eliminating waste and reducing delays and defects. Administrative costs All executive, organizational, and clerical costs associated with the general management of an organization rather than with manufacturing or selling. Allocation base A measure of activity such as direct labor-hours or machine-hours that is used to assign costs to cost objects. Avoidable cost A cost that can be eliminated by choosing one alternative over another in a decision. This term is synonymous with differential cost and relevant cost. Batch-level activities Activities that are performed each time a batch of goods is handled or processed, regardless of how many units are in the batch. The amount of resource consumed depends on the number of batches run rather than on the number of units in the batch. Benchmarking A systematic approach to identifying the activities with the greatest potential for improvement. Bill of materials A document that shows the quantity of each type of direct material required to make a product. Bottleneck A machine or some other part of a process that limits the total output of the entire system. Break-even point The level of sales at which profit is zero. Budget A detailed plan for the future that is usually expressed in formal quantitative terms. Capital budgeting The process of planning significant investments in projects that have long-term implications such as the purchase of new equipment or the introduction of a new product. Cash budget A detailed plan showing how cash resources will be acquired and used over a specific time period. Committed fixed costs Investments in facilities, equipment, and basic organizational structure that can't be significantly reduced even for short periods of time without making fundamental changes. Common cost A cost that is incurred to support a number of cost objects but that cannot be traced to them individually. For example, the wage cost of the pilot of a 747 airliner is a common cost of all of the passengers on the aircraft. Without the pilot, there would be no flight and no passengers. But no part of the pilot's wage is caused by any one passenger taking the flight. Common fixed cost A fixed cost that supports more than one business segment, but is not traceable in whole or in part to any one of the business segments. Constraint A limitation under which a company must operat