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Test 2 Study Guide

by: Emily-Kathryn Hoey

Test 2 Study Guide ACCN 3010

Marketplace > Tulane University > Accounting > ACCN 3010 > Test 2 Study Guide
Emily-Kathryn Hoey
GPA 3.9

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About this Document

Cover's all learning objectives that will be on the test
Managerial Accounting
Kris Hoang
Study Guide
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This 4 page Study Guide was uploaded by Emily-Kathryn Hoey on Sunday April 3, 2016. The Study Guide belongs to ACCN 3010 at Tulane University taught by Kris Hoang in Spring 2016. Since its upload, it has received 50 views. For similar materials see Managerial Accounting in Accounting at Tulane University.


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Date Created: 04/03/16
ACCN 3010 Spring 2016 MODULE 2 / TEST 2 Review Sheet: Learning Objectives and Problems Please review In-Class Assignment #3 and #4 in addition to the following: Chapter 8 • Learning Objectives: o LO8-1: Understand why organizations budget and the process they use to create budgets.  Planning- developing goals and preparing budgets to achieve those goals  Control- gathering feedback to ensure that the plan is being properly executed or modified as circumstances change  Master Budget: o First forecast sales Class 20 o Determine how much we need to produce in order to meet forecasted demand o Deploy resources for production (DL, DM, MOH) and operations (SG&A) o This gives us a picture of cash inflows and outflows o LO8-2: Prepare a sales budget, including a schedule of expected cash collections.  SALES BUDGET: Multiply budgeted unit sales by the selling price (sum to for quarter total)  SCHEDULE OF EXPECTED CASH COLLECTIONS: account for A/R from previous month’s sales and cash collections from current month sales o LO8-3: Prepare a production budget. Budgeted Sales + Desired Ending Inventory = Total Needs  Beginning Inventory = Required Production o LO8-4: Prepare a direct materials budget, including a schedule of expected cash Class 21 disbursements for purchases of materials. Production (from production budget) x Materials per unit = Production Needs + Desired End Inv. = Total Needed -Beginning Inv. = Materials to be purchased  SCHEDULE OF EXPECTED CASH DISBURSEMENTS: account for A/P from previous month’s purchases and cash disbursements from current month purchases o LO8-5: Prepare a direct labor budget. Units of Production x Direct Labor per unit = Labor hours required Guaranteed labor hours Labor hours paid (either labor hours required or guaranteed labor hours, whichever’s >) x Hourly wage rate = Total direct labor costs o LO8-6: Prepare a manufacturing overhead budget. Class 22 Budgeted DLH (needed not minimum DLHs for payment policy) x Variable MOHR = Variable MOH costs + Fixed MOH costs = Total MOH costs -Noncash Costs (depreciation is a noncash charge) = Cash disbursements for MOH o LO8-7: Prepare a selling and administrative expense budget. Budget Sales x Variable S&A Rate = Variable Expenses + Fixed S&A Expenses = Total S&A Expenses -Noncash Expenses = Cash S&A Expenses o LO8-8: Prepare a cash budget. Beginning cash balance Class 23 + Cash Collections = Cash Available - Cash Disbursements -DM -DL -MOH -SG&A -Equipment purchase -Dividend = Total Disbursement Excess/Deficiency Financing +Borrowing -Repayments -Interest =Total Financing Ending Cash Balance o LO8-9: Prepare a budgeted income statement. Sales -COGS =GM -Selling & admin expenses =Net Operating Income -Interest Expense =Net Income • In-Class Problems: E8-2, E8-3, E8-4, E8-5, E8-6, E8-8 • Connect Homework Problems: E8-14, E8-16 (Assignment #6) • Extra Review Problems: E8-10, E8-7, P8-27 (Solutions online in the respective class materials tab) Chapter 9 • Learning Objectives: o LO9-1: Prepare a flexible budget: estimate of what revenues and costs should have been, given the actual level of activity for the period Class 24 o Use actual quantity and planning rate assumptions o LO9-2: Prepare a report showing activity variances: shoes how a revenue or cost should have changed in response to the difference between actual and budgeted activity o Activity variances are differences between the flexible and planning budget amounts o LO9-3: Prepare a report showing revenue and spending variances: shows revenues/costs Class 25 were larger or smaller than should have been expected, given the actual level of activity o Difference between actual revenue/cost with flexible budget revenue/cost o LO9-4: Prepare a performance report that combines activity variances and revenue Class 26 and spending variances. Planning Activity Flexible Revenue & Spending Actual Budget Variances Budget Variances Results Activity Revenue Expenses Total Expenses Net Operating Income o LO9-6: Understand common errors made in preparing performance reports based on budgets and actual results. o Assuming that all costs are fixed when the managers adjust none of the costs for changes in activity o Assuming that all costs are variable, when managers adjust all of the costs for changes in activity • In-Class Problems: E9-4, E9-16, E9-15 • Homework Problems: E9-10, 11, 12 & 13 (Assignment #7) • Extra Review Problem: P9-21 (Solutions online in the respective class materials tab) Chapter 10 • Learning Objectives: o LO10-1: Compute the direct materials price and quantity variances and explain their significance. o Price Variance = Actual Quantity (Actual Price-Standard Price) o Quantity Variance = Standard Price (Actual Quantity- Standard Price) o LO10-2: Compute the direct labor rate and efficiency variances and explain their significance. o Rate Variance = Actual Hours (Actual rate- Standard rate) o Efficiency Variance = Standard Rate (Actual hour- standard hours) o LO10-3: Compute the variable manufacturing overhead rate and efficiency variances and explain their significance. o Rate Variance = Actual hours (Actual rate- Standard rate) o Efficiency Variance = Standard Rate (Actual hours- standard hours) • Homework Problems: E10-1, E10-4 (Assignment #8) • Extra Review Problem: E10-6 (Solutions online in the respective class materials tab)


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