Final Study Guide for Accounting II with Dragone

Final Study Guide for Accounting II with Dragone - Complete...

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Relevant Chapters: 2, 3, 5, 6, 7, 9, 11, 12, 13 Practice Questions for Final 3 Practice Tests 3 Current Tests Chapters in book as a reference Overview/Notes from Review Session (5/19/10) 3 costing methods Only difference between the 3 is how we handle OH Absorption Costing o GAAP approved – used for financial statements o By function o Can be manipulated through production o The more we produce, the more we can defer Variable Costing o By cost behavior Actual Costing o Actual OH o Have to wait until the end to come up with actual numbers Normal Costing o Estimated OH o POHR o Estimated production has to be converted into cost driver o Apply using actual cost driver hours x POHR o AQ x SP (SP is the same as POHR) o Inaccurate COGM o Not accurate on financial statements for users o Under/Overapplied OH Underapplied = not enough = subtract Overapplied = too much = add o Don’t forget to apply OH o Understand all terms from Chapter 2 Standard Costing o Put on jobs what we should have used o Actual production converted to SQ o SQ = actual production x SQ per unit of product x SP o SQ x SP (SP is the same as POHR) Mixed Costs o High/low method to figure out Contribution margin income statement Forecasting future Break even point o Increasing production won’t change break even Target profit analysis
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Performance evaluation o Profit centers o Responsible up to segment margin o Traceable FC – directly responsible o Common FC – can’t control directly Residual income Return on investment – how much the project is earning per $ of NOI Minimum required return – evaluate project by using residual income o ROI is not a good evaluation tool Transfer pricing o 100% = selling price o Excess = as low as variable cost Decision models (Chapter 13) o What does this item cost me? o Look specifically at fixed OH Variances o Standard costing o What should I have done? Based on actual production o Pay too much? o Used too much? Lecture Notes Chapter 2 Managerial Accounting and Cost Concepts Management accountant – working within the company I. What Do Managers Do? Plan o Formulate strategy o Make plans Direct o Organize resources o Direct personnel Control o Control operations Do job within scope of 3 activities: 1. Planning a. Formulate strategy (goal of the company) b. Identify alternatives and choose the best one i. ii. Budgets: plans in quantitative form prepared annually 2. Directing/Motivating a. Oversee day-to-day operations
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b. Encourage personnel c. Performance evaluation data 3. Controlling a. Is the plan being followed? Was it successful? b.
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Final Study Guide for Accounting II with Dragone - Complete...

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