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

Principles of Managerial Accounting

by: Ms. Demetrius Hane

Principles of Managerial Accounting ACCT 2101

Marketplace > University of Connecticut > Accounting > ACCT 2101 > Principles of Managerial Accounting
Ms. Demetrius Hane
GPA 3.79

Cliff Nelson

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

Cliff Nelson
Class Notes
25 ?




Popular in Course

Popular in Accounting

This 6 page Class Notes was uploaded by Ms. Demetrius Hane on Thursday September 17, 2015. The Class Notes belongs to ACCT 2101 at University of Connecticut taught by Cliff Nelson in Fall. Since its upload, it has received 14 views. For similar materials see /class/205908/acct-2101-university-of-connecticut in Accounting at University of Connecticut.


Reviews for Principles of Managerial Accounting


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: 09/17/15
Chapter 6 Value Chain A set of linked value creating activities that generate pro t value for a company What activities make your company money Cost Driver An event or activity that causes the costs incurred by a company you want the driver to be closely related to the costs themselves ex The cost amount of hay direct materials you have to purchase for your farm is driven by the number of cows you need to feed in the winter ex The cost of assembly labor is driven by the quantity of products manufactured w the number of parts in each product Semi Variable Cost 7 a variable and a xed component ex A copy machine in your of ce that is leased FC the monthly lease payment on the machine xed every period VC the monthly cost of paper for the copy machine based on use Step Fixed Costs 9 Costs remain xed over a wide range of activity but jump to a different amount for activity levels outside that range 9 Think Contract costs that are mostly constant but jumpfall with signi cant changes in production Step Variable Costs 9 Variable costs that are constant over a shortterm but increase in small steps instead of continuously over a longer period 9 Lots of small variable inputs to a process 7 no one input will change signi cantly as activityactivity drivers change Discretionary Costs A cost that results from a discretionary management decision to spend a particular amount of money 9 Remember at the end of the day you are a managerial accountant and not the actual manager You provide information to aid in the decision making but you do not necessarily actually make the decision Differential costs the amount by which the cost differs between two alternative actions ex Choose to buy RM from Company A for 20K or Company B for 23K Differential cost 3K Curvilinear Cost IncreasingDecreasing 9 Generally utility expenses telephone trash collection ex The waste management company gives you a dumpster that holds 1000 pounds of trash and charges you 1000 per month for collection If you exceed 1000 pounds the waste management company charges you an extra 25 per pound But if you are under 1000 pounds it doesn t matter if you have 200 or 999 pounds oftrash you will still pay 1000 Direct Materials Quantity Variance SP AQ SQ I Actual versus standard amount of materials used in production of standard cost Direct Materials Price Variance AQ AP SP I AQ actual materials purchased I AP Actual cost of materials purchased actual materials purchased I SP standard price Direct Labor Rate Variance AH AR SR Labor Efficiency Variance SR AH SH I SR standard labor rate I AH actual hours worked I SH standard labor hours per unit of output actual output Total labor variance Direct Labor Rate Variance Labor Efficiency Variance Budgeting I Flexible expected pricerate actual hrsunits 0 good for direct labor sales commission product delivery I Static expected pricerate expected hrunits I Actual actual pricerate actual hrunits Responsibility Center I Investment marketing advertising sales decisions all revenue amp costs where new stores should open stores lease or purchase facilities 0 Advantage of using residual income over ROI Desirable investment decision will not be rejected by division that already have high ROI I Profit marketing advertising sales decision revenue costs in store Transfer Prices I Variable Price Sale price Variable Price I Ex Annual production capacity 35000 units 0 Variable Cost per unit 24 Sales price 40 0 Want to sell product internally no savings in variable costs 0 24 40 24 40 I Opportunity Cost relevant to decision making I Prevention Costs quality training I External Failure customer complaints warranty costs I Differential Future Costs and Differential Future Revenues are always relevant I In a sell or process further decision a production cost incurred after the splitoff point is relevant I F 39 39 39 ofa manufacturin companv wishing to establish practical DM and DL standards Freight charges on incoming raw material Normal worker fatigue Production time used during setup procedures for new manufacturing runs The historical 2 defect rate associated with raw materials inputs NOT production time lost during unusual machinery breakdowns OOOOO Net Income CM S Chapter 9 Budgeting I Encourages communication up and down the organization I An excellent training tool for managers to learn the planning process to create a plan of action I Assist in the control of profit and operations I Allows for tracking performance against the budget facilitates communication amp coordinate activities I Sets benchmarks for evaluation performance I Uncovers potential bottlenecks I Formalizes a managers planning efforts Budgeting Sequence 1 Production Budget a Units Needed Unit Sales Desired Ending Inventory b Units to be produced Sales Desired Ending Inventory Beginning Inventory 2 Material budget 3 Inventory budget for material amp finished goods 4 Balance Sheet budget Sales operational budget cash budget in be CF Master Budget First make a sales budget expected sales in units sales price then make cash budget Zerobased budgeting I Forces management to reexam why their functions are needed I An analysis of benefits must be presented tojustify their budget Budgetary slack I Managers build slack into a budget so that they stand a greater chance of receiving favorable performance evaluations I Slack is used by managers to guard against uncertainty amp unforeseen events I Slack is used to guard against dollar cuts by top management in the resource allocation process Participative budgeting I Employees more motivated to achieve budget goals I Budget padding might be a greater problem I Budget preparation time will likely be longer I Ethical issues may rise especially when the budget is used as a basis for performance appraisal Top management budgeting I Employees may be disenchanted because they will be evaluated against a budget which they had little say in the development of Chapter 8 CVP I Includes changes in 0 Selling prices on a company s profitability Variable costs on a company s profitability Fixed costs on a company s profitability Overall changes in a company s profitability 000 Sales Variable Costs Contribution margin Traceable Fixed Costs Segment profit margin Common Fixed Expenses Net Operating Income Segment Budgeting Sales Variable Costs Contribution margin Fixed Costs TraceableI Controllable Profit margin controllable by the segment Fixed Costs TraceableI Uncontrollable Segment profit margin Common Fixed Expenses Net Operating Income In Fixed Costs Increased Breakeven point increases I Contribution Margin Sales price Variabe Cost per unit I Contirbution Margin Ratio 0 CM units produced and sold 0 Cm S I Units Needed to Reach Target Net Operating Income Total Fixed Costs Target Net Operating Income Selling price Variable cost per units Chapter 13 MT ROI SSCC


Buy Material

Are you sure you want to buy this material for

25 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

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."

Janice Dongeun University of Washington

"I used the money I made selling my notes & study guides to pay for spring break in Olympia, Washington...which was Sweet!"

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."

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.