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D 196 / D196 Objective Assessment (Latest Update 2025/ 2026) Principles of Financial and Managerial Accounting | Questions & Answers | Grade A | 100% Correct - WGU
Question:
master budget
Answer:
is a comprehensive financial plan that begins with the sales budget, determining expected sales for the period. From there, the process splits into
two teams:
- Production Planning Team (Factory Operations)
- Selling & Administrative Budget Team (Outside the Factory
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Question:
production budget
Answer:
is developed based on the sales budget, considering desired inventory levels and beginning inventory.
Sales budget + ending finished goods inventory - beginning finished goods inventory =
Question:
Direct Materials
Answer:
Materials that become part of the finished product and are easily traceable.
Question:
Direct Labor
Answer:
Wages paid to workers who physically transform materials into a finished product.
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Question:
Manufacturing Overhead
Answer:
All indirect manufacturing costs, including: Indirect materials (used in
maintenance/custodial work). Indirect labor (supervisors, factory security, maintenance staff). Other factory expenses (utilities, depreciation, rent).
Question:
differential costs
Answer:
Future costs that change as a result of a decision
Question:
sunk costs
Answer:
costs that have already been incurred and cannot be recovered
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Question:
opportunity costs
Answer:
These are the costs associated with missing out on the next best alternative when a decision is made; represents the potential benefit that is given up when one alternative is chosen over another
Question:
break-even point
Answer:
is the level at which a company has made enough sales to cover operating expenses.
total revenue = total costs (fixed + variable costs), meaning no profit or loss.
Question:
Stepped fixed costs
Answer:
means a cost increases when the activity of a business exceeds a certain level, and the fixed cost then suddenly increases, but remains fixed at this new higher level
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