Principles of Financial and Managerial Accounting - D196 WGU

the production budget - answer-Sales budget + ending finished goods inventory - beginning finished goods inventory direct materials production budget - answer-Production budget × direct materials per unit the direct materials purchases budget - answer-Direct materials production budget + ending direct materials inventory - beginning direct materials inventory Cash collected from customers - answer-(current period revenue × current period collection rate) + cash collected from previous period sales Cash payments to suppliers - answer-(current period purchases × current period payment rate) + cash paid on previous period purchases Cost Variance - answer-Difference between actual costs and budgeted costs Contribution Margin - answer-= Sales Revenue - Variable Costs The difference between total sales and variable costs; the portion of sales revenue available to cover fixed costs and provide a profit. Target Income - answer-= Sales Revenue - Variable Costs - Fixed Costs A profit level desired by management. At break-even - answer-Target income = 0 Sales Revenue - answer-= Sales Price x Number of Units Variable Costs - answer-= Variable Cost per Unit x Number of Units Costs that change in total in direct proportion to changes in activity level. Variable Cost Ratio x Sales Revenue - answer-Variable Costs Unit-level activities - answer-Activities that take place each time a unit of product is produced. Batch-level activities - answer-Activities that take place in order to support a batch or production run, regardless of the size of the batch. Product-line Activities - answer-Activities that take place in order to support a product line, regardless of the number of batches or individual units produced. cost pool - answer-Total cost being generated by a specific overhead cost activity. cost driver - answer-A numerical measure used to reflect the amount of a specific cost that is associated with a particular activity Activity rate - answer-The amount of the estimated cost pool divided by the estimated number of cost driver events How do expenses impact the accounting equation? - answer-Expenses decrease owners' equity Purpose of the accounting cycle? - answer-To turn information about transactions into financial statements How is gross profit computed? - answer-Sales minus cost of good sold Which type of account is retained earnings? - answer-Equity How does a classified balance sheet provide useful info to a decision maker? - answer-It