Accounting 2102 Comprehensive Final Exam Study Guide

Accounting 2102 Comprehensive Final Exam Study Guide -...

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Accounting 2102: Comprehensive Final Exam Study Guide Tuesday, April 12, 2016 23:09 Chapter 1 1 Understand the benefits of managerial accounting. Managerial accounting is the general generation of relevant information to support managers strategic decision making. Objectives of Managerial Accounting: 1. Planning: longer term and often referred to as "strategic" planning establishes an organizations wants. Short term wise planning is "organizational" and translate long term planning into something that will be handled within the year. 2. Controlling and evaluating : after the plans have been established then managers move on to controlling and evaluating the project. One purpose of controlling activities is that you are to monitor the day to day operations to ensure that everything is running smoothly. Evaluating activities are when managers want to motivate employees to help organizations achieve and plan strategic moves and must assess how well the perform relative to expectations 3. Decision making : important in managerial accounting because every choice will affect the day to day activities. 2 Identify the tests of ethical business choices as suggested by the Institute of Business Ethics Ethical behavior is knowing right from wrong and conducting yourself accordingly so that your decisions are consistent with your own value system and the companies value system. Employees have a code of conduct to follow which is based on a set of core values that are meant to guide employees behavior. 1. Employment Practices 2. Employee Client and Vendor Information 3. Public information and communications 4. Conflicts of interest 5. Environmental Issues 6. Relationships w vendors 7. Ethical Management Practices 8. Political Involvement Chapter 2 1 Identify Variable, Fixed and Mixed Costs and Step Costs Fixed costs : don't change with the activity level Total cost remains fixed whether of changes with level of activity The cost per units varies intensively with change in activity level Mixed costs : both fixed and variable components
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Since mixed costs have fixed and variable costs the unit costs will vary with change in activity level. Variable Costs : any total costs that varies in a proportion to business activities The "activity" can be any repetitive event that serves as a measure of output or usage. Total cost varies in proportion to change with level of activity, cost per unit remains constant regardless of the level of activity Step Costs : fixed over a small range of activity Once that level has been reached and extended total cost will remain constant over the time of another short activity. With step costs total costs increases and remains constant over another small range of activity.
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