BA 6601 MANAGERIAL ACCOUNTING
Assumption University
Graduate School of Business
Guideline for Written Comprehensive Examination 3/2010
Professional MBA Evening
Managerial Accounting (MA)
Dr. Surasakdi Prugsamatz
Part 2
COMPREHENSIVE EXAMINATION GUIDELINE
–by Dr. Surasakdi Prugsamatz
Topics to be
Examination:
prepared
for
Comprehensive
1. COST CONCEPTS AND CLASSIFICATIONS:
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PRODUCT COSTS AND PERIOD COSTS
NONINVENTORABLE UNEXPIRED COSTS
TYPES OF MANUFACTURING COSTS
ESTIMATED FACTORY OVERHEAD RATE COMPUTATION
PRIME COSTS AND CONVERSION COSTS
TYPES OF COST BEHAVIOR
MANUFACTURING COST FLOW - APPLICATION
SCHEDULE OF COST OF GOODS MANUFACTURED
INCOME STATEMENT FORMATS
2. COST VOLUME PROFIT ANALYSIS:
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CONTRIBUTION MARGIN CONCEPT AND FORMULA
COMPUTATION OF BEP AND TRAGET PROFIT
MARGIN OF SAFETY
OPERATING LEVERAGE
SALES MIX
3. ACTIVITY BASE COSTING SYSTEM (ABC & ABM) AND
TRADITIONAL COSTING SYSTEM (TCS):
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STANDARD FOH RATE COMPUTATION BASED ON TCS
STANDARD FOH RATE COMPUTATION BASED ON ABC
COST DISTORTION - OVER AND UNDER COSTING
TYPES OF ABC ACTIVITIES.
4. MASTER BUDGET:
 CASH BUDGET; INCOME STATEMENT BUDGET; AND
BALANCE SHEET BUDGET OF NON-MANUFACTURING AND
MANUFACTURING FIRMS.
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BA 6601 MANAGERIAL ACCOUNTING
5. FLEXIBLE BUDGET AND COST VARIANCE ANALYSIS:
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MASTER AND FLEXIBLE BUDEGT PERFORMANCE REPORT
COMPUTATION OF COST VARIANCES AND REASONS FOR
VARIANCES
6. DECISION MAKING:
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RELEVANT AND IRRELEVANT CONCEPTS
DIFFERENT TERMINOLOGY USED IN DECISION MAKING
TYPES OF DECISION MAKING
1.
COST CONCEPTS AND CLASSIFICATIONS:
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PRODUCT COSTS AND PERIOD COSTS
1. Characteristics of Product costs related to the merchandise and
manufacturing firms.
2. Characteristics of Period costs related to the merchandise and
manufacturing firms.
3. Understanding of Product and Period costs concepts related to
merchandise and manufacturing firms.
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NONINVENTORABLE UNEXPIRED COSTS
1. Characteristics of noninventorable unexpired costs
2. Differentiated between product costs and noninventorable
unexpired costs.
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TYPES OF MANUFACTURING COSTS
1. Concepts required identifying manufacturing costs into direct
costs.
2. Concepts required identifying manufacturing costs into
indirect costs.
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ESTIMATED FACTORY OVERHEAD RATE COMPUTATION
1. Concept of TCS.
2. Formula, based on TCS, used in computing FOH rate
3. Computation of FOH adjustment during the period.
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PRIME COSTS AND CONVERSION COSTS
1. How to compute the prime costs and conversion costs.
2. Application of prime costs and conversion costs in the problem.
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TYPES OF COST BEHAVIOR
1. Characteristics of various types of cost behavior such as
variable costs; fixed costs; mixed costs; step-fixed costs.
2. High-low method used in identifying variable and fixed costs.
3. Application of cost behavior in the problem.
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MANUFACTURING COST FLOW – APPLICATION
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BA 6601 MANAGERIAL ACCOUNTING
1. Permanent accounts namely Raw Materials Inventory account;
Work-in-process inventory account; and Finished Goods
inventory account.
2. Temporary accounts namely Factory Payroll; Factory
Overhead; Cost of goods sold.
3. Types of inventory methods – FIFO; LIFO; and weighted
average.
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SCHEDULE OF COST OF GOODS MANUFACTURED
1. Formulae required determining the CGM.
2. Average cost per unit.
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INCOME STATEMENT FORMATS
1. Functional/ Traditional Income Statement Format.
2. Contribution Margin Income Statement Format.
2.
COST VOLUME PROFIT ANALYSIS:
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CONTRIBUTION MARGIN CONCEPT AND FORMULAE
1. Meaning of contribution margin.
2. Common Contribution margin formulae.
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COMPUTATION OF BEP AND TRAGET PROFIT
1. Assumptions of CVP.
2. Methods used in BEP and Target Profit – Simple equation
method or contribution margin method.
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MARGIN OF SAFETY – AMOUNT AND PERCENTAGE
1. Meaning and computation of Margin of safety expressed in
units and percentage.
2. Interpretation of Margin of Safety.
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OPERATING LEVERAGE
1. Meaning of Operating Leverage.
2. Computation of Operating Leverage.
3. Application and Interpretation of Operating Leverage in
business.
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SALES MIX
1. Meaning of Sales Mix.
2. Calculation of Weighted Average Contribution Margin per
unit and Overall contribution margin percentage.
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BA 6601 MANAGERIAL ACCOUNTING
3. Computation of Sales Mix expressed in units and in amount
and allocation of the results to individual product.
3.
ACTIVITY BASE COSTING SYSTEM (ABC & ABM) AND
TRADITIONAL COSTING SYSTEM (TCS):
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STANDARD FOH RATE COMPUTATION BASED ON TCS
1. As stated in Topic 1.
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STANDARD FOH RATE COMPUTATION BASED ON ABC
1. Concepts of Activity Base Costing.
2. Difference between ABC and TCS.
3. Computation of POOL rate per selected cost driver.
4. Computation of POOL COST for the product line.
5. Computation of Cost per unit of a product line.
6. Concept of Activity base management.
7. Advantages and weaknesses of ABM.
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TYPES OF ABC ACTIVITIES
1. Five level of ABC activities meaning and objectives.
2. Characteristics and procedures of ABC.
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COST DISTORTION
1. Application of over or under cost distortion in decision making.
2. The interpretation of over or under cost distortion in problem.
4.
MASTER BUDGET:
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Preparing Cash budget; Income Statement budget; and Balance sheet
budget for non-manufacturing and manufacturing firms. It is necessary
to know how to prepare them with the given full or missing information.
5.
FLEXIBLE BUDGET AND COST VARIANCE ANALYSIS:
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MASTER AND FLEXIBLE BUDEGT PERFORMANCE REPORT
1. Performance report format and its particulars for both.
2. Characteristics of Flexible budget performance report.
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COMPUTATION OF COST VARIANCES AND REASONS FOR
VARIANCES
1. Formulae and calculation of DMPV and DMQV.
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BA 6601 MANAGERIAL ACCOUNTING
2. Formulae and calculation DLRV and DLUV.
3. Formulae and calculation of Variable FOH SV and Variable
FOH EV.
4. Formulae and calculation of Fixed FOH SV and Fixed FOH
VV.
5. Reasons for all the variances calculated above.
6.
DECISION MAKING:
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RELEVANT AND IRRELEVANT CONCEPTS
1. Characteristics of RELEVANT COST DATA.
2. Characteristics of IRRELEVANT COST DATA.
3. Basic classification of manufacturing and operating costs as
relevant and irrelevant costs.
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DIFFERENT TERMINOLOGY USED IN DECISION MAKING
1. Avoidable and unavoidable costs.
2. Opportunity costs.
3. Sunk costs; allocation costs, common costs, joint costs;
committed costs.
4. Internal costs; External costs.
5. Incremental costs; marginal costs.
6. Separable costs; cost of indifferent point.
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TYPES OF DECISION MAKING
1. Make or Buy decision including existence of additional
alternatives due to decision buy.
2. Special order decision including the price decision.
3. Joints Products decision including the allocation of joint costs
by relative sales value at split –off point.
4. Drop decision including the affect of drop decision on other
products.
5. Profit maximization through utilization of limited capacity
decision.
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BA 6601 MANAGERIAL ACCOUNTING
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