100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
ACC 241 Exam 3 Study Guide 294 Questions with Verified Answers,100% CORRECT $18.49   Add to cart

Exam (elaborations)

ACC 241 Exam 3 Study Guide 294 Questions with Verified Answers,100% CORRECT

 2 views  0 purchase
  • Course
  • ACC 241
  • Institution
  • ACC 241

ACC 241 Exam 3 Study Guide 294 Questions with Verified Answers

Preview 4 out of 43  pages

  • September 14, 2024
  • 43
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers
  • ACC 241
  • ACC 241
avatar-seller
paulhans
ACC 241 Exam 3 Study Guide 294 Questions with Verified
Answers
1. Forces managers to plan
2. Facilitates coordination and communication within the
business
3. Helps motivate personnel throughout organization to
meet planned objectives
4. Provides a standard for performance evaluation - CORRECT ANSWER Benefits of
Budgeting

Budgetary Slack - CORRECT ANSWER the practice of managers knowingly
including a higher amount of expenditures or a lower amount of revenue in a
budget.

Sales Budget > Production Budget > DM Budget > DL Budget > MOH Budget >
Operating Expenses Budget > Budgeted Income Statement - CORRECT ANSWER
Order of the Master Budget (Operating Budgets)

1. Cost Center
2.) Revenue Center
3.) Profit Center
4.) Investment Center - CORRECT ANSWER Four Types of Responsibility Centers

Cost Center - CORRECT ANSWER a division that incurs costs but does not directly
generate revenue.
Ex:
-production departments: packaging, distribution
-service/support departments: human resources, accounting departments

Revenue Center - CORRECT ANSWER a division that generates revenues
Ex: internet sales department

Profit Center - CORRECT ANSWER a division that generates revenues and incurs
costs.

,-Managers are evaluated on profitability of divisions
-Profit center managers often supervise both cost and revenue center managers
Ex: Tempe Walmart, Deli department of Fry's

Investment Center - CORRECT ANSWER a division that generates revenues, incurs
costs, and controls the investment of available funds.
-managers are evaluated on profitability of divisions and efficient use of assets.
Ex: subsidiary companies, Stand-alone divisions of a company

Return on Investment (ROI) - CORRECT ANSWER measures the amount of income
an investment center earns relative to the size of its assets.

Operating Income / Total assets - CORRECT ANSWER ROI Formula

Operating Income / Sales - CORRECT ANSWER Sales Margin Formula

Sales / Total Assets - CORRECT ANSWER Capital Turnover Formula

Residual Income (RI) - CORRECT ANSWER the difference between operating
income and the minimum return required on a company's assets.

=Operating Income - Minimum Acceptable Income

-OR-

=Operating Income -(Target rate of return * total assets) - CORRECT ANSWER
Residual Income Formulas

Flexible Budget - CORRECT ANSWER a budget prepared for a different level of
volume than the volume originally anticipated.

volume = actual volume

Volume Variance - CORRECT ANSWER the difference between the flexible budget
and the master budget

,Flexible Budget Variance - CORRECT ANSWER the difference between the flexible
budget and actual results

Common Causes of DM Variances - CORRECT ANSWER Price Variances:
- purchase of materials of different quality
-discounts
-freight/delivery expediting cost ("rush orders")

Quantity Variances:
-purchase of non-standard quality materials
-poorly trained or poorly supervised workers
-poorly maintained equipment

Common Causes of DL Variances - CORRECT ANSWER Rate Variances:
-Salary raise
-Salary cut

Efficiency Variances:
-Poorly trained or poorly supervised workers
-Poorly maintained equipment
-Out-of-date standards (may be applied to any variance)

1. Payback Period
2. Accounting Rate of Return (ARR)
3. Net Present Value (NPV)
4. Profitability Index
5. Internal Rate of Return (IRR) - CORRECT ANSWER Five Methods of Capital
Budgeting Analysis

Non-discounting models - CORRECT ANSWER do not consider time value of
money
-Payback Period
-Accounting Rate of Return (ARR))

Discounting models - CORRECT ANSWER consider time value of money.
-Net Present Value (NPV)
-Profitabilty Index

, -Internal Rate of Return (IRR)

Payback Period - CORRECT ANSWER the length of time to recover, in net cash
inflows, the cost of the capital investment.

(Investments with shorter payback periods are more desirable)

Payback Period with EQUAL Annual Net Cash Inflows Forumla - CORRECT ANSWER
initial investment / expected annual net cash inflow

Payback Period with UNEQUAL Annual Net Cash Inflows Formula - CORRECT
ANSWER Number of full years + (Amount to complete recovery / estimated net
cash inflow in the next year)

Accounting Rate of Return (ARR) - CORRECT ANSWER meaurses the avergae
annual rate of return over an asset's entire life

ARR Formula - CORRECT ANSWER = Average annual operating income from
asset / initial investment

=(average annual net cash inflow-annual noncash expense) / initial investment

Net Present Value (NPV) - CORRECT ANSWER the difference between the present
value of the investment's net cash inflows and the cost of the initial investment

there must be a discount rate

NPV formula - CORRECT ANSWER PV of net cash inflows - inital investment

Internal Rate of Return (IRR) - CORRECT ANSWER the discount rate that makes the
NPV of an investment zero

Annuity PV Factor - CORRECT ANSWER initial investment / annual net cash inflows

Relationship between the internal rate of return, the required rate of return, and
the net present value - CORRECT ANSWER 1. )Internal rate of return > required
rate of return the the net present value is positive

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller paulhans. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for $18.49. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

75632 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy study notes for 14 years now

Start selling
$18.49
  • (0)
  Add to cart