CFM Cost Accounting & Management Flashcards
6 cards from real CFM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CFM Cost Accounting & Management flashcards as text
What is the formula for the break-even point in units?
Answer: Fixed Costs / Contribution Margin per Unit
Break-even units = Fixed Costs / Contribution Margin per Unit, where contribution margin per unit = Selling Price - Variable Cost per Unit.
Which cost is an example of a direct material cost in manufacturing?
Answer: Steel used to produce a car frame
Direct materials are raw materials that can be directly and specifically traced to the finished product, such as steel in automobile manufacturing.
Under absorption costing (full costing), which of the following is included in product cost?
Answer: Fixed manufacturing overhead
Absorption costing includes all manufacturing costs — direct materials, direct labor, variable and fixed manufacturing overhead — in the product cost per unit.
What distinguishes variable costing from absorption costing?
Answer: Variable costing treats fixed manufacturing overhead as a period cost, not a product cost
Variable (direct) costing expenses fixed manufacturing overhead immediately as a period cost, whereas absorption costing includes it in inventory until goods are sold.
A manufacturer's direct labor efficiency variance is unfavorable when:
Answer: Workers used more hours than the standard hours allowed for actual production
The labor efficiency variance = (Actual Hours - Standard Hours) × Standard Rate; it is unfavorable when actual hours exceed the hours allowed for output produced.
What is a joint cost in cost accounting?
Answer: A common cost incurred to produce two or more products simultaneously up to the split-off point
Joint costs arise in processes that simultaneously produce multiple products (e.g., refining crude oil produces gasoline, jet fuel, and diesel), allocable only up to the split-off point.