Cost FINAL exam review:

Front

What is decentralization?

Back

Decentralization is the delegation of decision-making authority to lower management levels within an organization.

Front

How do you calculate estimated manufacturing overhead?

Back

Estimated manufacturing overhead can be calculated by multiplying the predetermined manufacturing overhead rate by the estimated direct labor cost.

Front

What is the primary managerial responsibility in an organization?

Back

The primary managerial responsibility in an organization is decision making.

Front

What is flexible budgeting?

Back

Flexible budgeting is a budgeting approach that adjusts for changes in the volume of activity, allowing for better cost control.

Front

What is the formula for calculating indirect material cost variance?

Back

Indirect material cost variance = Actual indirect material costs - Budgeted indirect material costs.

Front

What is the predetermined manufacturing overhead rate?

Back

The predetermined manufacturing overhead rate is an estimated rate used to allocate manufacturing overhead costs to products based on direct labor hours or other activity measures.

Front

What does a favorable variance indicate?

Back

A favorable variance indicates that actual costs were less than budgeted costs, leading to higher profits.

Front

What does an unfavorable variance indicate?

Back

An unfavorable variance indicates that actual costs were greater than budgeted costs, leading to lower profits.

Front

How do you determine the total estimated manufacturing overhead?

Back

Total estimated manufacturing overhead = Predetermined overhead rate x Estimated direct labor hours.

Front

What is the significance of goal congruence in management?

Back

Goal congruence refers to the alignment of individual goals with organizational goals, ensuring that all members work towards the same objectives.