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mid-term__2_-_study_guide_and_major_ideas - costs joint...

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ACCT 202 – Principles of Managerial Accounting Professor Steve Markoff MAJOR IDEAS ON MID-TERM #1 Study Guide by Topic o Variable Costing: o Definition o Differences between variable and full costing o Advantages & disadvantage o Variable costing income statement o Activity Based Costing: o What it is o Why we use it o Advantages/disadvantages o Cost Allocation: o Reasons for allocation o Definitions: cost objects, cost pools, allocation base, allocation rate o Steps in allocation process o Allocation of service department costs o Direct vs. other methods o Problems & limitations of allocation. o Incremental Analysis: o Definitions: Incremental revenue, incremental costs, incremental income, relevant costs, differential costs, sunk costs, opportunity costs, avoidable fixed costs, direct fixed costs, common fixed
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Unformatted text preview: costs, joint costs, split ‐ off point, etc. o Types of decisions : • Additional processing (sell now or process further) • Make or buy (outsourcing) • Dropping a product line • Joint products: sell or process further • Computing value of loosening a constraint • Allocating costs to joint products using relative sales value at split ‐ off o Pricing Decisions: o Definitions: • Special order, cost ‐ plus pricing, target costing, CPM, activity ‐ based pricing. o Types of pricing decisions : • Profit ‐ maximizing price • Pricing special orders • Cost ‐ plus pricing • Target pricing • Analyzing customer profitability • Activity ‐ based pricing...
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  • Fall '09
  • Barton
  • David Cayley, direct fixed costs, avoidable  fixed costs, Steve Markoff, allocation process  Allocation, common fixed  costs

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