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Accounting Midterm Study Guide

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by: Melanie Guerrero

Accounting Midterm Study Guide ACC 204

Marketplace > Pace University > Accounting > ACC 204 > Accounting Midterm Study Guide
Melanie Guerrero
GPA 3.43

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Includes ALL the material Hannon assigned for the midterms including all the diagrams and sheets for a better visual.
Managerial Accounting (20014)
James Hannon
Study Guide
50 ?




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"Almost no time left on the clock and my grade on the line. Where else would I go? Melanie has the best notes period!"
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This 23 page Study Guide was uploaded by Melanie Guerrero on Friday March 11, 2016. The Study Guide belongs to ACC 204 at Pace University taught by James Hannon in Spring 2016. Since its upload, it has received 195 views. For similar materials see Managerial Accounting (20014) in Accounting at Pace University.


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Almost no time left on the clock and my grade on the line. Where else would I go? Melanie has the best notes period!

-Leatha Wintheiser Sr.


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Date Created: 03/11/16
Managerial Accounting Midterm Study Guide ­ Hannon Chapter 1  Financial vs. Managerial  3 Pillars of Managerial Accounting: 1. Planning – establishing goals and specifying how to achieve them 2. Controlling – gathering feedback to ensure that the plan is properly executed or modified as  circumstances change  3. Decision Making – selecting a course of action from competing alternatives   Six business management perspectives: 1. Ethics Perspective 2. Strategic Management Perspective  3. Enterprise Risk Management Perspective 4. Corporate Social Responsibility Perspective 5. Process Management Perspective 6. Leadership Perspective  Chapter 2 For Predicting Cost Behavior:  Cost Classifications ­ Variable Cost For Assigning Costs to Cost Objects: ­ Fixed Cost ­ Direct Cost ­ Linearity Assumption/Relevant Range  ­ Indirect Cost ­ Mixed Costs (y = a+bX) For Manufacturing Companies: ­ Direct Materials For Decision Making: ­ Direct Labor ­ Differential Cost and Revenue ­ Manufacturing Overhead ­ Opportunity Cost and Sunk Cost  Mixed Cost Analysis/ High­Low Method Mixed Cost – contains both variable and fixed cost elements Y = a + bX Ex: High­Low Method Ex:  Traditional and Contribution Format Income Statement Chapter 3  Flow of Costs 1. Raw materials purchased 2. Direct and indirect materials issued into production 3. Direct and indirect factory labor costs incurred 4. Utilities and other factory costs incurred 5. Property taxes and insurance incurred on the factory 6. Depreciation recorded on factory assets 7. Overhead cost applied to Work In Progress 8. Administrative salaries expense incurred 9. Depreciation recorded on office equipment 10. Advertising and other selling and administrative expense incurred 11. Cost of goods manufactured transferred to finished goods 12. Sales of Job A recorded 13. Cost of goods sold for Job A JOURNAL ENTRIES T­Accounts \ MEMORIZE***  Deposition of Under/Over Applied MOH The under applied or over applied balance remaining in the manufacturing overhead account at the end of  a period is treated in one of two way: 1. Closed out to Cost of Goods Sold Ex: Cost of Goods Sold………………………………………..|5,000|           |     Manufacturing Overhead……………………………….|          |5,000 | 2. Allocated among the work in process, finished goods, and cost of goods sold accounts in proportion to  the overhead applied during the current period in ending balances Ex: Work in Process…………………………………………....|1,666.50|       | Finished Goods……………………………………………|833.50   |         | Cost of Goods Sold………………………………………..|2,5000   |       |      Manufacturing Overhead………………………………|     |5,000.00|  General Model of Cost Flows Chapter 5 Cost Volume Profit Contribution Margin Per Unit Ex: *For additional speakers* Depiction in Graphic Form Contribution Margin Ratio Ex: Formula Method Ex: Applications of CVP Concepts 1. Change in Fixed Cost and Sales Volume 2. Change in Variable Costs and Sales Volume 3. Change in Fixed Cost, Selling Price, and Sales Volume 4. Change in Variable Cost, Fixed Cost, and Sales Volume 5. Change in Selling Price Break­Even Analysis Equation Method Ex:          Break Even in Dollar Sales Equation Method Ex:        Target Profit Analysis                  Formula Method Equation Method Ex: Ex:                  Target Profit Formula Method Analysis in Dollar Sales Equation Method  Margin of Safety Formula Method In Dollars As a Percentage In Terms of units  Operating Leverage Degree of Operating Leverage Chapter 7  Activity­Based Costing Non­manufacturing Costs ­ ABC systems trace all direct nonmanufacturing costs to products ­ ABC systems allocate indirect nonmanufacturing costs to products whenever the products have  presumably caused the costs to be incurred Manufacturing Costs ­ ALL manufacturing costs are assigned to products Exhibit 7­6 ­ *Memorize* Getting Activity Rates Overhead Costs to Products Assigning Overhead Costs to Customers  Product Margin/ Customer Margin Product Margin Customer Margin What causes the difference between product margin and customer margin: ­ Customer Relations are caused by customers, not products  Comparison Traditional vs. ABC Profit & Loss Reasons why the traditional and activity­based costing system report differently: 1. Classic Brass’s traditional cost system allocates all manufacturing overhead costs to products. The  ABC does not assign the manufacturing overhead costs consumed by customers 2. Traditional cost system allocates all the manufacturing overhead costs using a volume­related  allocation base­machine­hours­ that may or may not reflect what actually causes the cost 3. The product margins differ between the two cost systems is because the ABC system assigns the  nonmanufacturing overhead costs caused by products to those products on a cause­and­effect basis Chapter 8  Master Budget Estimates and Assumptions Hampton Freeze, Inc. Schedules *ABSOLUTE EMPHASIS*


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