ACC 202 Study Guide Exam 2.docx - ACC 202 Exam#2 Review Mr...

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ACC 202– Exam #2 Review Mr. Moore – Fall 2017 **The following is not a comprehensive list of everything you know, just a guide to point you to topics you should focus on more than others. The best way to study is to read and re-read the chapters, and then review and study your chapters 6-8 homework. You should also study the learning catalytics questions that we went over in class for each chapter. Chapter 6: Know the differences in cost behavior between fixed, variable, and mixed costs. o Variable Costs : Cost incurred for every unit of volume Example: Drinks and snacks/Shampoo, lotion, mouthwash is given to every guest (slope of variable cost is line represents variable cost per activity) Changes in direct proportion to volume Cost equation : Total variable cost = Variable cost per activity * Volume of activity( y = vx) o Fixed Costs: Do not change in total despite changes in volume. Example: Property taxes and insurance, lease payments on equipment, cable tv Committed fixed costs: locked in costs due to previous management decisions Discretionary fixed costs: result of angular management decisions (companies have more control Cost equation: Total fixed cost = Fixed amount over a period of time(y = f) When volume increases then fixed cost per activity decreases, When volume decreases then fixed cost per activity decreases
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o Mixed Costs: Contain both Variable and fixed Cost components Example: a hotel requires a certain amount of utilities just to operate & the more guests stay at the hotel, the more water, electricity, and gas required Combines the variable and fixed cost equation: Total mixed costs = variable cost component + Fixed cost component( y = vx + f ) Variable cost in total increases as volume increases, but variable cost per unit (V) stays the same. Fixed cost in total stays the same in total as volume goes up, but the fixed cost per unit goes down as volume goes up. Remember, the same fixed cost is spread across more units and makes it cheaper per unit. Know the full formula for a mixed cost (Y=VX + F), and even more than that, understand the relationships of everything in that formula. You need to be able to solve for any unknown in that formula if all other figures are given. There were at least one or two catalytics questions that
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