AGENDA: FLEXIBLE BUDGETS AND PERFORMANCE ANALYSIS
Preparing flexible budgets.
Calculating activity variances.
Calculating revenue and spending variances.
D. Preparing flexible budgets with more than one cost driver.
Understanding common errors
Chapter 13 - Capital Budgeting Decisions
A. The Concept of Present Value. A dollar today is worth more than a dollar in the future for
the simple reason that a dollar can be invested today to yield more than a dollar in the future.
When an inve
Chapter 9 - Flexible Budgets and Performance
The term static budget refers to the budget that is set at the beginning of a budgeting period and
that is geared to only one level of activitythe budgeted level of activity.
Chapter 8 - Profit Planning
The Basic Budgeting Framework
A budget is a detailed plan outlining the acquisition and use of financial and other
resources over a specified time period.
1. Planning and control. A good budgeting system must provide
AGENDA: CAPITAL BUDGETING DECISIONS
Present value concepts.
1. Interest calculations.
2. Present value tables.
Net present value method.
Internal rate of return method.
D. Cost of capital as a screening tool.
Further aspects of the net present
VARIABLE COSTING/SEGMENT REPORTING
1. Variable costing and absorption costing are alternative
methods of determining unit product costs. They affect
inventory valuations and net operating income.
A. Key elements of variable and absorption costing.
Chapter 6 - Variable Costing and Segment
At least two methods can be used in manufacturing firms to value units of product for
accounting purposes-absorption costing and variable costing. These methods differ only in
how they treat fix
Chapter 10 - Standard Costs and Variances
Management by Exception
A standard is a benchmark or norm for measuring performance. In managerial accounting,
standards relate to the cost and quantity of inputs used in manufacturing goods or providin
AGENDA: STANDARD COSTS AND OPERATING PERFORMANCE
1. Setting standard costs
a. Ideal vs. practical standards
b. Direct materials standards
c. Direct labor standards
d. Variable manufacturing overhead standards
2. Standard cost ca
AGENDA: Activity-Based Costing (ABC)
The activity-based costing model
Differences between traditional costing and activity-based
Steps for implementing activity-based costing
The ABC cost hierarchy
An example of activity-based costi
AGENDA: PROFIT PLANNING (BUDGETING)
Which way should I go?
That depends on where you are going.
I dont know where Im going!
Then it doesnt matter which way you go!
Lewis Carroll, Through the Looking Glass, 1872.
A. Purposes and ove
Chapter 7 - Activity-Based Costing
1. ABC and GAAP. Some ABC systems are used as replacements for a companys regular
costing system and are used for external as well as for internal financial reports. However, in
most cases, a companys ABC syste
AGENDA: MANAGERIAL ACCOUNTING AND COST
A. Cost classifications for:
1. Financial statement preparation.
2. Predicting cost behavior.
3. Assigning costs to cost objects.
4. Making decisions
B. Least-squares regression computations using Microsoft
AGENDA: MANAGERIAL ACCOUNTING
AND THE BUSINESS ENVIRONMENT
Management Accounting is a system that collects, classifies,
summarizes, analyzes and reports information that will assist
managers in their decision-making and control activities.
A. What is mana
Chapter 2 Managerial Accounting and Cost
The objective of this chapter is to discuss the various ways in which costs can be
classified. The purpose of the classification determines how the classification
should be done. For example, cla
AGENDA: JOB-ORDER COSTING
A. The documents and flow of costs in job-order costing.
1. Materials requisition form.
2. Direct labor time ticket.
3. Job cost sheet.
B. Applying overhead using a predetermined overhead rate.
1. Computing the predetermined over
Chapter 3 - Job-Order Costing
Costing Systems. Two major types of costing systems are used in manufacturing and many
service firms: process costing and job-order costing.
1. Process Costing. A process costing system is used where a single, homog
AGENDA: PROCESS COSTING
A. Differences between job-order and process costing.
B. Overview of cost flows in process costing.
C. The concept of equivalent (whole) units for partially
D. The weighted-average method for determining costs.
Chapter 5 Cost-Volume-Profit Relationships
Cost-volume-profit (CVP) analysis is a key step in many decisions. CVP analysis involves
specifying a model of the relations among the prices of products, the volume or level of activity,
Cost-volume-profit (CVP) analysis is concerned with the effects on
net operating income of:
Unit variable costs.
Total fixed costs.
The mix of products sold.
Review of contribution income statement.
Chapter 4 - Process Costing
Job-Order Costing vs. Process Costing
Process costing is used in industries that produce homogenous products such as bricks, flour, and
cement on a continuous basis.
1. Similarities between job-order and process costi