BMGT 221 Final: Accounting FINAL STUDY SHEET
Document Summary
Performance report: compares budgeted data to actual data = find areas of excellent and unsatisfactory performance: decision making. Fixed/variable cost: product costs all costs involved in acquiring & making product. Recorded as expenses in the period the products are sold: period costs s&a expenses. Expensed in the period they were: fixed costs stays constant, regardless of changes in level of activity. Can be influenced by an outside force. (landlord decides to increase monthly rent) Ex: straight-line depreciation, insurance, property taxes, rent, supervisory salaries, administrative salaries, advertising. Committed fixed costs: long term investments in facilities, equipment, and organizational structure. Can"t be reduced even for short periods of time without making fundamental changes. Discretionary fixed costs: come from annual decisions by management. Can be cut for short periods of time with minimal damage to long-run goals: variable costs varies in total, in direct proportion to the change in the level of activity. Activity base (cost driver) is whatever causes the variable cost.