1) Identify each of the company's expenses as either variable, fixed, or mixed. For the FC list the total fixed costs per month
for each month. For VC list the variable cost per unit for each month. For MC list the average cost per unit for each mixed
Review for Exam 1
Chapter 1 4
Things to Know
Planning, Directing, and Controlling
Budget Vs. Actual
Managerial Accounting focuses on Internal
Do not worry about shareholders
Ethics and IMA
Credibility, Integrity, Conf
Sales in Units
Cost of Goods Sold
Selling and Administrative
Morrisey and Brown
For the Three Months Ending September
Units produced & sold
Direct Labor Hours
# of Machine hours
# of Set Ups
# of Inspection runs
# of packing orders
Chapter 4: Activity-Based Costing
Simple Cost Allocation Systems
Using a plantwide overhead rate can result in cost distortion.
o Some products are overcosted, while others are undercosted.
Chapter 3: Job Costing
Methods to Determine Cost to Manufacture a Product
Process Costing Used by manufacturers who produce large
numbers of identical units.
o Manufacturing is split into processes, and costs are tracked as
they flow through each process
Chapter 2: Building Blocks of Managerial Accounting
Most Common Business Activities
Service Companies Sell intangible services, and now makes up the
largest sector of the U.S. economy.
Accounting and law firms
Chapter 1: Introduction to Managerial Accounting
What is Managerial Accounting?
Focus is on providing internal management with the information it needs to
run the company efficiently and effectively.
o _Planning_ - Setting goals and objectives for the
Chapter 10: Performance Evaluation
Splitting operations into different operating segments.
Advantages of Decentralization
Frees top managements time
Encourages use of expert knowledge
Improves customer relations
Chapter 9: The Master Budget
How and Why are Budgets Used
Budgets help to plan for the future and control the revenues and costs related
to those plans.
Budgeting is an ongoing cycle:
Develop Strategy Plan Act Control
Strategic Planning: Setting long-te
Chapter 8: Relevant Costs for Short-Term Decisions
How managers make decisions
First: Define Business Goals
Second: Identify Courses of Action
Third: Gather and Analyze relevant info: Compare Alternatives
Fourth: Choose the Best Alternative
Chapter 7: Cost-Volume-Profit Analysis
Study of the effects of changes in costs and volume on a companys profits.
Expresses the relationships among costs, volume, and profit.
Components of CVP Analysis
Chapter 6: Cost Behavior
Cost Behavior: How costs change as volume changes
Variable Costs: Costs that are incurred for every unit of volume.
Vary in total proportionately with changes in volume. Per unit
o Examples: Direct materials, dir