Cost Management and Analysis Flashcards
7 cards from real CPFM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Cost Management and Analysis flashcards as text
What is the breakeven point in units if fixed costs are $50,000, price is $25, and variable cost per unit is $15?
Answer: 5,000 units
Breakeven = $50,000 / ($25 - $15) = 5,000 units.
Joint costs incurred before the split-off point should be allocated to joint products primarily for:
Answer: Inventory valuation and financial reporting
Joint cost allocation matters for inventory valuation, not for incremental processing decisions.
A cost that remains constant per unit but varies in total with activity is a:
Answer: Variable cost
Variable costs are constant per unit and change proportionally in total with activity.
Target costing begins with which value?
Answer: Desired market price
Target costing starts from a competitive market price and works backward to allowable cost.
The degree of operating leverage measures:
Answer: Sensitivity of operating income to changes in sales
Operating leverage shows how a percentage change in sales magnifies the change in operating income.
Which variance compares the actual hours worked at the standard rate to the standard hours allowed at the standard rate?
Answer: Labor efficiency variance
The labor efficiency variance isolates differences in hours used, valued at the standard rate.
A sunk cost is best described as a cost that:
Answer: Has already been incurred and cannot be changed
Sunk costs are past expenditures that no current decision can alter.