Managerial Accounting exam

Managerial Accounting exam

Study Guide Exam #6

Chapter 8

• Know the advantages of budgeting and self-imposed budgets • Know what a master budget is and in what order a master budget is prepared (see Exhibit 8-1 on

pg. 346) • Know how to prepare the following budgets: sales budget, schedule of cash collections (see

Connect Ch 8 Homework Question 1 and Schedule 1 on pg. 353), production budget (see Connect Ch 8 Homework Question 2 and Schedule 2 on pg. 354), the direct materials budget (see Connect Ch 8 Homework Question 3 and Schedule 3 on pg. 356), and the cash budget (see Connect Ch 8 Homework Question 4 and Schedule 8 on pg. 362)

• Be able to complete a problem such as Connect Ch 8 Homework Question 5

Chapter 12

• Know the definitions of differential costs, differential revenues, relevant costs and benefits, avoidable/unavoidable costs, sunk costs, opportunity costs (pgs. 532-533), joint costs (pg. 553) and incremental costs (this definition was on pg. 46)

• Be able to identify relevant costs and benefits (see Connect Ch 12 Homework Question 1) • Understand the dangers of allocating fixed costs (see pgs. 540-541 and pg. 553) • Know how to make decisions related to the following: adding/dropping product lines or

segments (see Connect Ch 12 Homework Question 2 and 7), make or buy decisions (see Connect Ch 12 Homework Question 3), special orders (see Connect Ch 12 Homework Question 4), constraints (see Connect Ch 12 Homework Question 5), and sell or process further (see Connect Ch 12 Homework Question 6)

Topics that will NOT be covered on this exam:

• Do not need to know how to prepare the direct labor budget, manufacturing overhead budget or ending finished goods budget (pgs. 356-359)

• Do not need to know how to prepare the budgeted income statement or budgeted balance sheet (pgs. 364-367)

• Activity-based costing and relevant costs on pg. 555


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