AICPA Managerial Accounting Flashcards
6 cards from real AICPA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 AICPA Managerial Accounting flashcards as text
Which variance measures the difference between the actual overhead incurred and the overhead applied to production based on standard rates?
Answer: Total overhead variance
The total overhead variance is the difference between actual overhead costs incurred and the overhead applied to products using predetermined standard rates.
The theory of constraints (TOC) focuses management attention primarily on:
Answer: Identifying and exploiting the bottleneck that limits system throughput
TOC holds that overall system throughput is limited by one constraint (bottleneck), and improving non-bottleneck resources yields no throughput gain until the bottleneck is addressed.
Under the economic order quantity (EOQ) model, which two costs are balanced to find the optimal order quantity?
Answer: Ordering costs and carrying (holding) costs
EOQ minimizes total inventory cost by finding the order quantity where ordering costs (per order) equal carrying costs (per unit held), their sum being minimized.
A manager is deciding whether to accept a special one-time order at a price below the normal selling price. The key question is whether:
Answer: The price exceeds the variable cost of the order and idle capacity exists
For a special order with idle capacity, any price above variable cost generates a positive contribution margin and improves overall profit.
In a job-order costing system, the Work-in-Process (WIP) account is debited for which of the following?
Answer: Direct materials, direct labor, and applied manufacturing overhead
WIP accumulates the three product costs—direct materials, direct labor, and applied overhead—until jobs are completed and transferred to Finished Goods.
Which performance measure, used in decentralized divisions, is calculated as net operating income divided by average operating assets and evaluates a division's ability to generate returns on its asset base?
Answer: Return on investment (ROI)
Return on Investment (ROI) = Net operating income ÷ Average operating assets, measuring how efficiently a division uses its assets to generate profit.