Study Guide Midterm #1
Study Guide Midterm #1 Acc 204
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This 4 page Study Guide was uploaded by Brandon Sangster on Friday October 16, 2015. The Study Guide belongs to Acc 204 at Pace University taught by Picheng Lee in Fall 2015. Since its upload, it has received 75 views. For similar materials see Financial Accounting in Business at Pace University.
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Date Created: 10/16/15
Study Guide Midterm 1 ACC 204 Chapters 2 3 5 7 Chapter 2 Managerial Accounting and Cost Concepts Kev Terms and Definitions Prevention Costs Support activities Whose purpose is to reduce the number of defects Appraiill Costs Incurred to identify defective products before the products are shipped out Internal Failure Costs Incurred as a result identifying defects before they ship External Failure Costs Incurred as a result of defective products being delivered to customers ISO 9000 Standards Companies must demonstrate a quality control system and must be sustained to be certified by a company Manufacturing Costs Direct Materials Direct Labor and Manufacturing Overhead Nonmanufacturing Costs Selling costs Administrative costs Prime Cost Is the sum of direct materials cost and direct labor cost Conversion Cost Is the sum of direct labor cost and manufacturing overhead costs Variable Cost Cost that varies in direct proportion to changes in the level of activity Fixed Cost Cost that remains constant regardless of the changes in the level of activity Activity Base A measure of What causes the incurrence of a variable cost Product Costs Associated with the Balance Sheet Income Statement Period Costs Associated With just the Income Statement Examples Variable and Fixed cost Behavior refer to Pg 34 22 Mixed Cost Behavior Pg 37 2 5 Fixed cost and the Relevant Range Pg36 23 all in the Connect Textbook winter 3 Job Order Costing Kev Terms and Definitions 0 Allocation Base It is used to assign manufacturing overhead to individual jobs Also it is used to track overhead costs to certain jobs and has a range of many different items The manufacturing overhead costs are fixed even though there is uctuation and is a cost driver 0 gPOHRg Used to apply overhead to jobs determined before the period begins 39 J 0b Cost Sheet Involves a requisition form and time ticket to track an item and calculate the unit and total cost 0 Under applied overhead When overhead applied to jobs during the period is less than the total amount of overhead 0 Over QDDlied overhead When overhead applied to jobs during the period is greater m the total amount of overhead Work In Process The time between the raw materials being made into finished goods Raw Materials Any materials that go into the final product Finished Goods Completed units of products that have not been sold to customers Cost of Goods Manufactured The manufacturing costs associated With the goods that were finished during the period 0 Total Manufacturing CostsIt s the direct materials used plus direct labor and Manufacturing overhead Examples Flow of Costs 35 to 38 Pg 9497 Cost of Goods Manufactured and Sold 311 3 12 Pg 102104 Under applied and Over applied overhead 313 314 Pg 105107 in the Connect Textbook Chapter 5 CostVolumePro t Relationships Kev Terms and Definitions 0 Operating Leverage Is a measure of how sensitive net operating income is to percentage changes in sales 0 Erget Profit AnalsLis 0 Contributjon Income Statement 0 Break Even Sales in Units 0 mrgin of ngetv in Doll Contributjon Margin Is the amount remaining from sales revenue after variable expenses have been deducted Breg Even sales in Doll Examples Margin of Safety Pg 204 205 Sales Mix 54 55 Pg 210 Cost Structure Pg 206 208 in the Connect Textbook Chapter 7 Activitv Based Costing Kev Terms and Definitions Activitv Based Costing It is designed to provide managers With cost information and it differs from traditional cost accounting in that it uses both nonmanufacturing and manufacturing cost and that it uses more cost pools Activity An event that causes the consumption of overhead resources Transaction Driver Duration Driver Unit Level Batch Level Action Analysis Report Activity Rate Ouantitv Break Even Sales Breg Even Examples ABC Model 72 73 Pg 292295 Mechanics of ABC Pg 295305 74 to 712 Comparison of Tradition to ABC Model Pg 306307 713 714 in Connect Textbook Chapter 1 Ethical Conduct Kev Term nd Definitions 0 Competence Being able to provide accurate information to a company Without Violating laws that would hurt the company 0 Confidentgllitv Keeping information Within the company and not using the information for personal benefits and gratification O Integrity Anytime there is a Violation of ethical conduct committed the integrity of that person and company comes into question 0 Credibilitv Making sure that the information given is fully disclosed Without hiding any details that may persuade a decision
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