Exam_Study_Guide

Exam Overview

• Exam Information: Refer to the cover page and D2L announcements for additional details.

• Chapters Covered:

  • Pre-Midterm: 1 (Introduction to Management Accounting), 2 (Building Blocks of Managerial Accounting), 3 (Cost Behaviour), 4 (Cost-Volume-Profit Analysis), 5 (Job Costing), 7 (Activity-Based Costing and Lean Operations)

  • Post-Midterm: 8 (Short-Term Business Decisions), 9 (The Master Budget and Responsibility Accounting), 10 (Flexible Budget and Standard Costs), 3A (Absorption vs. Variable Costing), 12 (Capital Investment Decisions and Time Value of Money)

Key Topics for Exam Preparation

Pre-Midterm Topics

• Chapter 1: Managerial vs. Financial Accounting

• Chapter 2:

  • Direct Materials Used in Production

  • Cost of Goods Manufactured

  • Cost of Goods Sold

• Chapter 3:

  • Types of Costs

  • Methods of Cost Behaviour Analysis

  • High-Low Method

  • Cost Formula

  • Total Variable Cost

  • Regression Analysis (interpretation of output and coefficients usage)

• Chapter 4:

  • Contribution Margin

  • Operating Income

  • Contribution Margin Ratio

  • Break-even Point (in units and sales dollars for single/multiple products)

  • Target Profit (in units and sales dollars)

  • Margin of Safety (in units, dollars, and percent)

  • Degree of Operating Leverage

  • Percentage Change in Profits

  • New Operating Income

• Chapter 5:

  • Predetermined Overhead Rate

  • Applied Overhead

  • Total and Unit Product Cost

  • Over or Under Applied Overhead

  • Journal Entries for Job Costing

• Chapter 7:

  • Department Overhead Rates

  • Applied Overhead Total and Unit Cost using Department Overhead Rates

  • Cost Allocation Rate (Activity-Based Costing)

  • MOH Allocated to Job (Activity-Based Costing)

  • Cost Distortion (function-based vs. volume-based costing)

Post-Midterm Topics

• Chapter 8:

  • Target Pricing

  • Cost-Plus Pricing

  • Special Order Decisions

  • Dropping a Product/Department

  • Product Mix Decisions

  • Make or Buy Decisions

  • Sell or Process Further Decisions

  • Transfer Pricing Decisions

• Chapter 9:

  • Define and prepare operating budgets and major components

  • Explain interrelationships of budget components

  • Define and prepare financial budgets and major components

  • Explain interrelationships of financial budgets' components

• Chapter 10:

  • Variance Analysis concepts

  • Investigation criteria for variances

  • Compute and analyze static budget variances, sales volume variances, flexible budget variances

Appendix Topics

• Appendix 3A and Posted Materials:

  • Prepare variable costing income statements (short and long versions)

  • Prepare absorption costing income statements (short and long versions)

  • Compare operating income under both costing methods

  • Reconcile variable and absorption costing incomes

  • Calculate inventories under variable and absorption costing

• Chapter 12:

  • Importance of capital investments and budgeting process

  • Payback and accounting rate of return methods

  • Time value of money computations for lump sums and annuities

  • Discounted cash flow models (Net Present Value) for investment decisions

  • Compare capital budgeting methods

Topics NOT Included in the Exam

• Internal Rate of Return (Chapter 12)

• Chapter 6 (Process Costing)

• Chapter 11 (Performance Evaluation and Balanced Scorecard)

• Chapter 13 (Financial Statement Analysis)

• Chapter 14 (Sustainability)