Review Sessions, Sunday March 23rd:
Schmuhl:
O’Tousa:
Hums:
Meyer:
1:00 PM, Jordan Auditorium (MCoB)
4:00 PM, DBRT 102
5:00 PM, DBRT 101
8:30 PM, DBRT 101
Problems:
Multiple Choice (30 questions, 3 points each) covering:
Points
90
Chapter 5, CVP: LO 2, LO 5, LO 6, LO8 (18 points)
Master Budget: LO 7-1, 7-2, 7-3, 7-4, 7-5, 7-6 (36 points)
Chapter 9, Flexible Budget: LO 2, LO 3 (12 points)
Chapter 10, Variances: LO 1, LO2 (24 points)
10
Problem #1: Sales Mix
25
Problem #2: Cost-Volume Profit Analysis
125
Total Points
Cost-Volume-Profit Relationships (Chapter 5, GNB text)
Learning Objectives:
LO1 Explain how changes in activity affect contribution margin and net operating income.
LO2 Prepare and interpret a cost volume-profit (CVP) graph and a profit graph.
LO3 Use the contribution margin ratio (CM ratio) to compute changes in contribution margin and net operating
income resulting from changes in sales volume.
LO4 Show the effects on net operating income of changes in variable costs, fixed costs, selling price, and volume.
LO5 Determine the level of sales needed to achieve a desired target profit.
LO6 Determine the break-even point.
LO7 Compute the margin of safety and explain its significance.
LO8 Compute the degree of operating leverage at a particular level of sales and explain how it can be used to
predict changes in net operating income.
LO9 Compute the break-even point for a multiproduct company and explain the effects of shifts in the sales mix
on contribution margin and the break-even point.
Planning for Profit and Cost Control (Supplement, pp. 80 – 96)
Learning Objectives:
LO 7-1: Describe the budgeting process and the benefits it provides
LO 7-2: Prepare a sales budget and related schedule of cash receipts
LO 7-3: Prepare an inventory purchases budget and related schedule of cash payments
LO 7-4: Prepare a selling and administrative expense budget and related schedule of cash payments
LO 7-5: Prepare a cash budget
LO 7-6: Prepare a pro forma income statement (contribution margin format) and balance sheet
Flexible Budgets and Performance Analysis (Chapter 9, GNB text)
Learning Objectives:
LO1 Prepare a flexible budget.
LO2
Prepare a report showing activity variances.
LO3
Prepare a report showing revenue and spending variances.
LO4
Prepare a performance report that combines activity variances and revenue and spending variances.
LO5
OMIT pp. 394 and 395
LO6
Understand common errors made in preparing performance reports based on budgets and actual results.
Standard Costs and Variances (Chapter 10, GNB text) pp. 418-432; 435-443
Learning Objectives:
LO1 Compute the direct materials quantity and price variances and explain their significance.
LO2
Compute the direct labor efficiency and rate variances and explain their significance.