Principles of Financial and Managerial Accounting - D196 WGU Questions & Answers 2024/2025

Principles of Financial and Managerial Accounting - D196 WGU Questions & Answers 2024/2025the 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 distinguishes between current and long-term assets What are the three primary functions that company managers use managerial accounting info for? - ANSWER-Planning, controlling, evaluating How could a period cost be reported in an income statement? - ANSWER-As an admin expense How are the wages of the cashiers classified in a merchandising company? - ANSWER-Selling expense What is the label given to the quantity computed as estimated level of activity - ANSWER-Predetermined overhead rate In a job order costing system, what is the proper accounting for a product cost? - ANSWER-It is reported as a part of cost of goods sold Which item is a period cost? - ANSWER-Utility bills to heat the headquarters building Accounting System - ANSWER-The procedures and processes used by a business to analyze transactions, handle routine bookkeeping tasks, and structure information so it can be used to evaluate the performance and health of the business. Activity-based Costing (ABC) - ANSWER-A method of attributing overhead costs to products based on measurable factors that relate to activities that create overhead costs. Arm's-length Transaction - ANSWER-A transaction in which a buyer and seller act independently to get the best possible deal. Articulation - ANSWER-The interrelationships among the financial statements. Assets - ANSWER-Economic resources that are owned or controlled by a company. Accounting Equation - ANSWER-An algebraic equation that expresses the relationship between assets (resources), liabilities (obligations), and owner's equity (net assets, or the residual interest in a business after all liabilities have been met): Assets = Liabilities + Owners' Equity. Batch-level Activities - ANSWER-Activities that take place in order to support a batch or production run, regardless of the size of the batch. Book Value - ANSWER-The value of a company measured by the amount of owner's equity in the company. Break Even - ANSWER-To make just enough income to cover costs without any profit or loss. Break-even Point - ANSWER-The amount of sales at which total costs of the number of units sold equal total revenues; the point at which there is no profit or loss. Budget - ANSWER-A quantitative expression of a plan that shows how a firm or organization will acquire and use resources over some specified period of time. Business - ANSWER-An organization operated with the objective of making a profit from the sale of goods or services. Business Documents - ANSWER-Records of transactions used as the basis for recording accounting entries; include invoices, check stubs, receipts, and similar business papers. Capital Budgeting - ANSWER-Systematic planning for long-term investments in operating assets. Accounting Cycle - ANSWER-The procedure for analyzing, recording, summarizing, and reporting the transactions of a business. Cash Budget - ANSWER-A short-term schedule of expected cash inflows and outflows during a period of time. Certified Public Accountant (CPA) - ANSWER-An accountant who has met specified professional requirements established by the AICPA and local and state societies. A key service provided by CPAs is the performance of independent audits of financial statements. Classified Balance Sheet - ANSWER-A balance sheet that distinguishes between current and long-term assets. Comparative Financial Statements - ANSWER-.....