ac102_rev01-03 - Revised Spring 2011 EXAM REVIEW UNIT I -...

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Revised Spring 2011 Page 1 of 24 EXAM REVIEW UNIT I - CHAPTERS 1, 2 and 3 Study Suggestions Review your class notes, homework exercises and problems. Review Summary, Review Problem and Glossary at the end of each chapter. Use your Study Guide, especially Multiple Choice and True & False questions Review the resource materials and practice quizzes and exams available on the Textbook Website: http://highered.mcgraw-hill.com/sites/0073048836/information_center_view0/ Additional review materials are available online at sites such as: http://www.cliffsnotes.com/WileyCDA/Section/id-305261.html Key Terms and Concepts to Know Chapter 1 - Managerial Accounting and Cost Concepts Major differences between financial and managerial accounting. Management activities: o Planning o Directing and motivating o Controlling o Feedback Period costs (nonmanufacturing costs): o Selling & Administrative Expenses Product costs (inventory costs or manufacturing costs): o Direct materials o Direct labor o Manufacturing overhead Prime cost (direct materials and direct labor) Conversion Cost (direct labor and manufacturing overhead) Cost behavior: o Variable Cost o Fixed cost o Relevant Range Cost object: o Direct Cost o Indirect cost
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Revised Spring 2011 Page 2 of 24 Cost Classifications used in decisionmaking o Differential cost and differential revenue o Opportunity cost o Sunk cost Flow of product costs through inventory accounts to cost of goods sold o Raw materials o Work in process including manufacturing overhead o Finished goods o Cost of goods sold Schedule of Cost of Goods Manufactured Income Statement including calculation of the cost of goods sold Schedule of Cost of Goods Sold Chapter 2 - Systems Design: Job Order Costing Differences and similarities between job order and process costing. Flow of overhead costs: o How to compute predetermined overhead rates o How to apply overhead costs to production o How to compute over and under applied overhead and close it to the appropriate account. Flow of product costs and overhead costs through the three inventory accounts and overhead account into cost of goods sold. Journal entries required in a Job Order Cost system. Chapter 3 - Systems Design: Activity-Based Costing Differences between activity-based costing and a traditional costing system. Distinguish between unit-level, batch-level, product-level, and facility-level activities and costs. Understand the ABC methodology: o How to compute activity rates for cost pools. o How to assign costs to products. o How to compute overhead cost per unit for each product. o How to compute total unit cost for each product. o
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This note was uploaded on 06/01/2011 for the course ACCOUNTING 102 taught by Professor All during the Spring '11 term at Harper.

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ac102_rev01-03 - Revised Spring 2011 EXAM REVIEW UNIT I -...

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