Managerial Accounting Flashcards
6 cards from real Accounting Online Program practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Managerial Accounting flashcards as text
The break-even point is reached when:
Answer: Total revenue equals total costs (fixed + variable)
The break-even point occurs when total revenue equals total costs, meaning the company has neither a profit nor a loss.
What does a favorable cost variance indicate?
Answer: Actual costs were less than budgeted costs
A favorable cost variance means actual costs were lower than the budgeted or standard costs, which is generally a positive outcome.
Which costing method assigns all manufacturing costs (fixed and variable) to products?
Answer: Absorption costing
Absorption costing (also called full costing) includes both fixed and variable manufacturing costs in the cost of a product.
Which of the following is a non-financial performance measure used in managerial accounting?
Answer: Customer satisfaction score
Non-financial performance measures like customer satisfaction scores help managers assess operational effectiveness beyond what financial statements capture.
A sunk cost is best described as:
Answer: A cost that has already been incurred and cannot be recovered
Sunk costs are past costs that have already been incurred and are irrelevant to future decision-making because they cannot be recovered.
Which managerial accounting tool helps identify the most profitable mix of products given limited resources?
Answer: Theory of constraints / linear programming
Linear programming and the theory of constraints help managers optimize the product mix to maximize contribution margin when resources are constrained.