New User Special Price Expires in

Let's log you in.

Sign in with Facebook


Don't have a StudySoup account? Create one here!


Create a StudySoup account

Be part of our community, it's free to join!

Sign up with Facebook


Create your account
By creating an account you agree to StudySoup's terms and conditions and privacy policy

Already have a StudySoup account? Login here

Study Guide Midterm Chapter 1-4

by: Kelly Villanueva

Study Guide Midterm Chapter 1-4 Acc212

Marketplace > University of Miami > Accounting > Acc212 > Study Guide Midterm Chapter 1 4
Kelly Villanueva
GPA 3.5
Mangerial Accounting

Almost Ready


These notes were just uploaded, and will be ready to view shortly.

Purchase these notes here, or revisit this page.

Either way, we'll remind you when they're ready :)

Preview These Notes for FREE

Get a free preview of these Notes, just enter your email below.

Unlock Preview
Unlock Preview

Preview these materials now for free

Why put in your email? Get access to more of this material and other relevant free materials for your school

View Preview

About this Document

This is for chapters 1-4.
Mangerial Accounting
Study Guide
50 ?




Popular in Mangerial Accounting

Popular in Accounting

This 9 page Study Guide was uploaded by Kelly Villanueva on Thursday February 12, 2015. The Study Guide belongs to Acc212 at University of Miami taught by Perez in Fall2014. Since its upload, it has received 254 views. For similar materials see Mangerial Accounting in Accounting at University of Miami.


Reviews for Study Guide Midterm Chapter 1-4


Report this Material


What is Karma?


Karma is the currency of StudySoup.

You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!

Date Created: 02/12/15
Acc 212 study guide Chapter 2 0 Direct costs direct materials and direct labor 0 Indirect costs manufacturing overhead 0 Product costs cost of buying or making inventory 0 Period costs administrative and selling expenses marketingadvertisingcommissions Prime costs direct materials direct labor Conversion costs direct labor manufacturing overhead Manufacturing overhead at the factory indirect materials that do not become part of the nished goods ex equipment amp indirect labor ex supervisors managers janitors etc amp other ex rent utilities insurance depreciation etc Variable costs remain the same per unit regardless of activity As activity increases variable costs increase hourly wages Fixed costs remain the same regardless of total activity As activity increases the xed cost per unit decreases rent salary Contribution margin per unit revenuecogsvariable expensesunits sold Contribution income statement 0 Sales revenue 0 variable exoenses o contribution margin 0 xed expenses 0 Net income income statement Sales revenue 0 Cost of goods sold l39l product costs 0 Gross Margin pro t 0 Seling and administrative D period costs 0 ncome tax o net income Chapter 3 Job order costing individual itemjob Process costing calculate the average cost per item chapter 4 Calculate the overhead rate Estimated manufacturing overheadestimated cost driver rate How to make the adjustment actual hoursoverhead rateappied compare applied to actual if actual gt applied increase cost of goods sold decrease revenue if actual lt applied decrease cost of goods sold increase revenue Cost of a job direct materials direct labor and manufacturing overhead Calculate cost of goods manufactured Calculate cost of goods sold Accounting 212 Chapter 2 Types of costs 0 Direct costs costs that are easily traceable D direct materials direct labor 0 Indirect costs common costsshared costs costs that are not easily traceable gt allocate the costs split D manufacturing overhead 0 cost of buying or making our inventory D asset in our balance sheet Once sold it becomes cost of goods sold inside of income statement INVENTORY selling marketingadvertisingcommissionsetc and administrative expenses cost of running the business CEO CFO attorneys accountants D directly on income statement Product costretailer Purchase price Freight in Insurance while in transit Import dutiesimport taxes manufacturer 0 raw materials that become part of the nished goods 0 cost of employees who are working on the assembly line a 1 indirect materials materials and supplies used at the factory that do not become part of the nished goodsequipment 2 indirect labor supervisors managers janitors etc that are at the factory 3 other rent utilities insurance depreciation at the factory direct materials direct labor direct labor manufacturer overhead Retailer only has one type of inventory nished goods inventory Manufacturer types of inventory 0 Raw materials inventory 0 Work in process inventory 0 Finished goods inventory once sold they become cost of goods sold Variable cost remain the same per unit regardless of activity If something is 100 variable numbervariable costtotal cost hourly employees Fixed costs remain the same in total cost regardless of activity Rent employee39s salary Mixed cost both variable and xed costs Sept2 Total costs xed costs variable costs always mixed nd total costs on income statement 3 methods of splitting total costs Scatter graph manually plot historical data into a graph lease used How to 1 plot data 2 make line of best t this line represents total cost mixed cost 3 nd y intercept xed costs 4 slope variable cost 0 Regression analysis most accurate same as scatter graph except that we use software excel Highlow method this is the method that will be tested on in class use 2 data points select the period with highest activity and lowest activity Main problem one or both of the pieces of data may be an outlier Cost equation y a bx Y total cost A total xed cost Bx total variable cost b variable cost per unit x level of activity How to create high low method 1 Select the highestlowest activity then ignore the rest of the data 2 Solve for variable cost per unit b Cost at the high cost at the low activity at the highactivity at the low change in costchange in activity 3 Solve for xed costs solve for xed costs a use the cost equation 4 Compare cost equation REFER TO PRACTICE QUESTION Biggest mistake is not selecting the highest and lowest activityDON39T PICK COST Sept4 Traditional income statement 0 Required by GAAP Give to investors in annual report 0 Split expenses between product costs and period costs Sales revenue Cost of goods sold l39l product costs Gross Margin pro t Seing and administrative D period costs lncome tax net income IOOOOOO Contribution income statement Not allowed by GAAP Can only be used internally Split our expenses between variable costs and xed costs 0 Sales revenue 0 variable exoenses o contribution margin 0 xed expenses 0 Net income Dependent on activity sales revenue variable expenses contribution margin 0 Not dependent on activity xed expenses Refer to traditional versus contribution format income statement for example problem Chapter 3 job order costing 2 ways of keeping track of the cost per itemjob 1 Job order costing keep track of the costs of each individual itemjob Spreadsheet job cost sheet direct materials direct labor manufacturing overhead 0 Direct materials and direct labor direct costs D easily traceable Manufacturing overhead indirect materials indirect labor rent utilities insurance etc D shared costs 2 Process costing calculate the average cost per itemjob chapter 4 Use the traditional approach to allocate manufacturing overhead 1 Estimate the amount of manufacturing overhead for year 2 Select the cost driver activity 0 Machine hours 0 Labor hours 0 Labor costs 3 Calculate the predetermined overhead rate Estimated manufacturing overheadestimated cost driver rate Ex 100000 20000 machine hours 5hour 91114 Retailer cost of goods sold beginning Finished goods inventory cost of goods manufactured I39lneed direct material direct labor and manufacturing overhead cost of goods available for sale ending nished goods inventory cost of goods sold 91614 Chapter 4 Process Costing At the end of the period we calculate the average cost of the items Step 1 calculate the number of equivalent units of units completed of units in ENDING work in process complete equivalent units demonstrates effort Step 2 calculate the cost per equivalent unit cost of beginning work in process current period costs of equivalent units average cost per unit Step 3 and step 4 Total Cost D step 3 transferred to nished goods D remains in ending work in process nd this by total cost nished goods use this method for cybertext Conversion cost direct labor manufacturing overhead Always ignore beginning percentages Sept18 Step 1 l of equivalent units completed units in ENDING WIP complete Step 2 average cost per unit cost of the beginning WIP current costs of equivalent units average cost per unit exam Chapter 14 no questions on chapter 1 40 MC 75 of grade 2 free answer problems chapter 2 high low method chapter 4 process costing not journal entries will be the split sheet 12 cybertext MC chapter 2 termz on termz direct vs indirect product cost vs period cost prime costs and conversion costs only man over if its happening at the factory variable vs xed costs 10 questions on terms 2 income statements and contribution income statements how to come up with the numbers Chapter 3 calculate the overhead rate always based on estimates how to make the adjustment or what the adjustment is how to come up with the cost of a job every job requires direct materials direct labor and manufacturing overhead based on the rate we used to allocate calculate cost of goods manufactured and cost of goods sold 18 questions on journal entires in chapter 3 amp 4 schveet No speci c questions on chapter 4 besides for the free response 1030 Chapter 9 Flexible Budget and Variances D differences between the budgets and the actual results Static Budget 1 level of activity Flexible budget prepare it for any level of activity After construct the exible budget compare to actual results 114 1 revenue and spending D variances D differences favorable unfavorable Actual results vs exible budget 1162014 1 Direct Materials Variances l two variances that explain why we are over or underbudget a 1 Direct Materials Price Variance D at the time of purchase did we pay more or less b than expected Actual quantity purchased actual price vs actual quantity purchased standard price c 2 Direct Materials quantity Direct Materials usage variance D at the factory did they waste materials or were they ef cient Actual quantity used standard price vs standard quantity allowed standard price 2 Direct Labor Variances D 2 variances that explain why we spent more or less than expected on labor a 1 direct labor rate variance did we pay the assembly line workers more or less than expected actual hours worked actual rate vs actual hours worked standard rate b 2 direct labor ef ciency variance did the workers waste time or were they ef cient actual hours worked standard rate vs standard hours allowed standard rate 3 Overhead Variances How do we evaluate management Company evaluate management 1 Pro t Margin Return on Sales Net income Sales Revenue D how much pro t do they make for every in sales 2 Asset Turnover sales revenue average total assets D for every in assets how much are they generating in sales 3 Return on Investment ROI net income average total assets D For every in assets how much are they generating in pro ts 4 Residual Income actual income required income assets required rate of return D amount of income above what was required Chapter 12 Relevant cost per unit Chapter 13 capital budgeting 122 Capital budgeting process of deciding whether to invest or not in capital assets property plant and equipment 4 characteristics 1 High cost 2 Cost quickly becomes a sunk cost 3 Assets have very long lives 4 There is high risk 4 methods of capital budgeting Net present value NPV common because of time value of money Internal rate of return common because of time value of money Payback period ignore time value of money Accounting rate of return or simple rate of return ignore time value of money PWN Any investment we make must earn more than the cost of capital cost of attaining the To nance project borrow D interest D cost of debt sell stock equity D dividends cost of equity EX cost 100000 life 5 years salvage value scrap residual 0 generate annual net cash in ows 27750 using straight line depreciation cost of capital 9 O 1 2 3 4 5 100000 27750 27750 2775027750 OCF 0 salvage NPV use calculator on exam yes or no answer 1 calculate present value of cash ows annuity and calculate the salvage present value 2 present value of cash ows cost investment 3 if NPVgt0 making more than cost of capital so accept project pro tability index present value of cash owsinitial investment how to decide what project to accept IRR are we making gt given cost of capital 1 calculate the factor cost of investment annual net cash in ows 2 look up factor in PV of annuity table if gt cost of capital then accept project Payback Period D ignores time value of money D how many years does it take to recover our investment 1 Cost of investmentannual net cash in ows same formula as IRR 2 Use very sparingly Accounting Rate of Return simple rate of return l ignores time value of money only method that uses depreciation expense D that investors will see in GAAP nancial statements 1 Annual depreciation expense costsalvage of years 2 Annual accounting income annual net cash in owsannual depreciation 3 Annual accounting incomecost of investment FINAL EXAM REVIEW Exam Thursday email Perez on Monday 11 am get there at 1030 am 70 MC65 5 problems35 1 from rst exams FR journal entries from chapter 3 materials labor work in process FR 0 4 problems from new stuff 2 chapter 8 D budgets one is cash collection schedule cash receipt schedule saes forjan feb march cash account 20 collection pattern how much was collected each month 0 the other is direct material purchases budget one in class with 7 different budgets ft of wood in connect its lbs or something 0 Chapter 13 two problems 4 methods of capital budget EZ yo can use nancial calculatorjust need to write out inputs MC 1 20 1St 7 chapters 50 new Chapter Nothing xed costs variable costs mixed costs more than just knowing de nition need to apply cost that changes per unit xed 1 high low method problem no mc process costing number of units cost per unit calculate break even target pro t calculate the CM per unit ratio break even by segment always ignore common xed costs no questions activity based costing budgets 1 question production budget exible budget changes with output adjust the budget only expenses that change are variable take the original budget and convert to exible did a few in class 23 questions on exible budget variances 1010 Q direct materials direct labor manufacturing overhead VARIANCES DM price quantity DL rate ef ciency 11Ratios return on investment residual income pro t margin 56 Q on ratios 125 decisions makebuy and the dollar amount special order acceptnot and why sell noprocess further constrained resource if not enough hours which unit do we produce rst could be hours or materials drop a segment 20 on each 136 Q Nl 39 PWNQP FPquot Most of it is calculations xedvariable is theory which cost changes which cost stays the same Tuesday no class look at old exams GO 82 Weds 812 Conversion costs Product costs Prime costs Period costs


Buy Material

Are you sure you want to buy this material for

50 Karma

Buy Material

BOOM! Enjoy Your Free Notes!

We've added these Notes to your profile, click here to view them now.


You're already Subscribed!

Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'

Why people love StudySoup

Jim McGreen Ohio University

"Knowing I can count on the Elite Notetaker in my class allows me to focus on what the professor is saying instead of just scribbling notes the whole time and falling behind."

Kyle Maynard Purdue

"When you're taking detailed notes and trying to help everyone else out in the class, it really helps you learn and understand the I made $280 on my first study guide!"

Steve Martinelli UC Los Angeles

"There's no way I would have passed my Organic Chemistry class this semester without the notes and study guides I got from StudySoup."

Parker Thompson 500 Startups

"It's a great way for students to improve their educational experience and it seemed like a product that everybody wants, so all the people participating are winning."

Become an Elite Notetaker and start selling your notes online!

Refund Policy


All subscriptions to StudySoup are paid in full at the time of subscribing. To change your credit card information or to cancel your subscription, go to "Edit Settings". All credit card information will be available there. If you should decide to cancel your subscription, it will continue to be valid until the next payment period, as all payments for the current period were made in advance. For special circumstances, please email


StudySoup has more than 1 million course-specific study resources to help students study smarter. If you’re having trouble finding what you’re looking for, our customer support team can help you find what you need! Feel free to contact them here:

Recurring Subscriptions: If you have canceled your recurring subscription on the day of renewal and have not downloaded any documents, you may request a refund by submitting an email to

Satisfaction Guarantee: If you’re not satisfied with your subscription, you can contact us for further help. Contact must be made within 3 business days of your subscription purchase and your refund request will be subject for review.

Please Note: Refunds can never be provided more than 30 days after the initial purchase date regardless of your activity on the site.