ACCT 202 STUDY GUIDE
FALL 2010
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Calculation of a predetermined overhead rate and how the overhead rate is applied to
production.
The components of product cost.
The difference between product costs and selling, general, and administrative expenses.
The difference between fixed costs, variable costs, and mixed (semi-variable) costs.
The behavior of total fixed costs and total variable costs.
The behavior of unit fixed costs and unit variable costs.
Calculation of contribution margin, unit contribution margin, and the contribution margin
ratio and how to apply each of these in the analysis of cost, volume, and profit.
The relevant range of production.
The calculation of a target cost.
The calculation of the breakeven point in sales dollars and sales units.
The calculation of the margin of safety.
The calculation of the effect on net income from an increase in sales.
The calculation of the sales required to produce a certain pretax profit.
The difference between a cost object and cost driver.
The difference between direct materials, indirect materials, direct labor, and indirect
labor.
The difference between overapplied and underapplied overhead.
Determination of a relevant cost, an opportunity cost, a sunk cost, and a controllable cost.
Decisions associated with limited resources.
Determination of the cost of a product or service.
Application of activity-based costing (ABC).
The sequence of preparing a budget.
Preparation of a purchases budget.
Preparation of an accounts receivable budget.
Preparation of a cash collections budget.
Preparation of an accounts payable budget.
Preparation of a cash disbursements budget.
Preparation of a cash budget.
Preparation of a flexible budget.
Determination of favorable and unfavorable variances from standard costs.
The difference between a cost center, profit center, and an investment center.
Calculation of the profit margin, asset turnover, return on investment, and residual
income.
The difference between raw materials inventory, goods in process inventory, finished
goods inventory, and cost of goods sold.
Determination of cost flows from purchase of raw material to the sale of the finished
product.
The difference between a product cost and a period cost.
The operation of a job-order cost system.
The difference between common stock, preferred stock, treasury stock, and additional
paid-in capital (contributed capital).
The difference between cash dividends, stock dividends, and stock splits.
Determination of the various types of preferred stock; e.g., cumulative preferred stock.
The difference between the declaration date, record date, and the payment date when a
corporation issues a dividend.
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The purpose of the statement of cash flows.
Identification of cash flows from operating activities, investing activities, and financing
activities.
The typical components of operating cash flows.
The typical components of investing cash flows.
The typical components of financing cash flows.
The difference between cash inflows and cash outflows.
The difference between the direct method and indirect method in the preparation of the
statement of cash flows.
Determination of which costs are allocated and which costs are not allocated in preparing
an analysis of departmental costs.
The process of cost allocation among departments or business units.
Preparation of a cost of goods manufactured schedule.
Preparation of a cost of goods sold schedule.
Preparation of a contribution margin income statement.