Acct 226 Exam 2 Study Guide
Acct 226 Exam 2 Study Guide ACCT 226 - 001
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This 2 page Study Guide was uploaded by Madeline Lacman on Sunday October 16, 2016. The Study Guide belongs to ACCT 226 - 001 at University of South Carolina taught by Debbie Huguley Brumbaugh (P) in Fall 2016. Since its upload, it has received 61 views. For similar materials see Introduction to Managerial Accounting in Accounting at University of South Carolina.
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Date Created: 10/16/16
Acct 226 Exam 2 Study Guide Equations Unit Contribution Margin= selling price per unit – variable expenses per unit Contribution Margin= Sales – variable expenses Contribution Margin Ratio = Contribution Margin/Sales Break-even in units= Fixed Expenses/Unit Contribution Margin Dollar Sales to Break Even= Fixed Expenses/CM Ratio Unit Sales to Attain a Target Profit= Target Profit Amount + Fixed Expenses/Unit Contribution Margin Margin of Safety in Dollars = Total Sales – Break even sales Degree of Operating Leverage = Contribution Margin/Net Operating Income Gross Margin = Sales Revenue – COGS Budgeted Sales Dollars = projected # of units to be sold x selling price Required Production Needs = budgeted sales – beginning inventory + desired ending inventory Materials Needed= qty of materials needed to meet production + qty of materials needed for desired ending inventory – qty of materials in beginning inventory Under Variable Costing Product Costs = DM+DL+VMOH Under Absorption Costing Fixed MOH is treated as a product cost Calculate a per unit average cost and use as a part of the unit product cost Product Cost = DM+DL+VMOH+ Fixed MOH Under Activity Based Costing Product Margin = Sales-DM-DL-OH What to Know: Look over CVP graph Variable costing is used with CVP analysis Absorption costing spreads fixed costs of units produced between units sold and units remaining in inventory o If the number of units produced exceed number of units sold some fixed costs remain on those units remaining in inventory Acct 226 Exam 2 Study Guide o Net operating income under absorption would be greater than net operating income under variable costing o All fixed expenses were not charged to the period If production in units is taken from the Production Budget o When you get to the materials budget you must convert number of units to quantity of materials needed o If you need to produce 10 units and each unit takes 5 pounds then the quantity of materials needed for production is 50 pounds How to calculate budgeted cash collections for a period when given % of collections by month MOH Budget includes both fixed and variable costs o Calculate what variable OH would be for the level of expected activity units o Add to that total variable costs the estimate for fixed overhead o Remember: if asked for “cash disbursements for MOH” exclude any non-cash items like depreciation
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