WGU D074 Principles of Accounting Exam Solved 100% Correct

Actual Manufacturing Overhead - ANSWER-Manufacturing costs other than direct materials and direct labor. Break Even - ANSWER-To make just enough income to cover costs without any 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 Documents - ANSWER-Records of transactions used as the basis for recording accounting entries; include invoices, check stubs, receipts, and similar business papers. Business - ANSWER-An organization operated with the objective of making a profit from the sale of goods or services. Contribution Margin Ratio - ANSWER-The percentage of net sales revenue left after variable costs are deducted; the contribution margin divided by net sales revenue. Differential Costs - ANSWER-Future costs that change as a result of a decision; also called incremental or relevant costs. Economy of Scale - ANSWER-A pattern of decreasing costs per unit as unit volume increases. Estimated Manufacturing Overhead - ANSWER-Budgeted manufacturing overhead costs that are used to establish the predetermined overhead rate. Evaluating - ANSWER-Analyzing results, rewarding performance, and identifying problems. Expenses - ANSWER-The amount of assets consumed through business operations; the costs incurred in normal business operations to generate revenues. Horizontal Analysis - ANSWER-A method of financial statement analysis that compares a firm's results from year to year. Opportunity Costs - ANSWER-The benefits lost or forfeited as a result of selecting one alternative course of action over another. Owners' Equity - ANSWER-The remaining claim against the assets of a business after the liabilities have been deducted. Securities and Exchange Commission (SEC) - ANSWER-The government body responsible for regulating the financial reporting practices of most publicly owned corporations in connection with the buying and selling of stocks and bonds. Segment Margins - ANSWER-The difference between segment revenue and direct segment costs; a measure of the segment's contribution to cover indirect fixed costs and provide costs; in effect, the operating profit created by the segment. Target Income - ANSWER-A profit level desired by management. Variable Cost Ratio - ANSWER-The ratio of variable costs to sales. Variable Costs - ANSWER-Costs that change in total in direct proportion to changes in activity level. (Sales Price×Units)−(Variable Cost×Units)−Fixed Costs=Target Income or Sales Revenue−Variable Costs−Fixed Costs=Target Income - ANSWER-Target income equation Sales Revenue−(Variable Cost Ratio×Sales Revenue)−Fixed Costs=Profit ($0) Break-Even Point in Sales Dollars equation - ANSWER-Break-Even Point in Sales Dollars equation Articulation - ANSWER-The interrelationships among the financial statements. Period Costs - ANSWER-Costs not directly related to a product, service, or asset. They are charged as expenses to the income statement in the period in which they are incurred. Account - ANSWER-An accounting record in which the results of transactions are accumulated; shows increases, decreases, and a balance. 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. 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. American Institute of Certified Public Accountants (AICPA) - ANSWER-A professional organization for CPAs in which membership is voluntary.