ACG 2071 Midterm 1 Review Concepts; Chpts 1 4

Know terminology End of each Chapter has Accounting Vocabulary

Chapters 1 & 2 more definitional issues than problems
Chapters 3 & 4 more problem based
Chapter 1: Introduction to Managerial Accounting
Managers 4 Primary Responsibilities
Differences in Managerial & Financial Accounting
Role of Management Accountants
Chapter 2: Building Blocks of Managerial Accounting
Know terminology: controllable/noncontrollable; Differential, Incremental, fixed, variable;
Product/period; Prime/Conversion
Know value chain
Know difference between Product Costs & Period Costs and where they are on Fin.Sts.
Chapter 3: Job Costing
Types of product costing systems
Job Costing
Process Costing
Know flow of inventory (product) through Manufacturing System
R/M Inven WIP Inven FG Inven COGS
Know how to calculate COG Manufactured; COGS
How are DM, DL & MOH assigned to jobs?
DM & DL directly traced
MOH allocated by Predetermined Overhead Allocation Rate know steps
1. Estimate total MOH for coming year
2. Select allocation base & estimate total amount for coming year
3. Calculate POHR
4. Allocate MOH to each job worked on during year
What happens to under-or-over-applied overhead: material/nonmaterial

How do Service Firms use job costing to determine amount to bill clients
Direct costs/indirect costs
Chapter 4: ABC, Lean Operations & Costs of Quality
Cost Allocation Systems: Plant Overhead Rate, Departmental Overhead Rate, ABC
Know process steps
Indirect Costs: Indirect Manufacturing Costs MOH Product Costs
Indirect Operating Costs S,G & A expenses Period Costs
Know Cost Hierarchy and how used to help set up Activity Cost Pools
Costs: Unit-level, Batch-level; Product-level; Facility-level
Know signs that old cost system may be distorting costs
Activity-Based Management What is it? How used by Managers?
How do Traditional & Lean Production (Operations) Systems Differ?
Know terminology: Value Stream Mapping; Self-Contained Cells; 5S Workplace
Organization; Point-of-Use Storage; Takt time; Pull System; Backflush Costing;
Total Quality Management
Prevention Costs, Appraisal costs, Internal Failure costs, External failure costs
Using Costs of Quality Framework to Aid Decisions

To get ready for Exam 1, complete as many problems in MAL as you can. In addition to assigned
Homework Problems and Midterm 1 Review Problems complete extra problems in the MAL Study Plan.
To Access these extra problems:
See link on Class website under Course Files:
Extra Problem Instructions in MAL and follow the Instructions.
Remember, make sure you print out the entire problem in the Study Plan and work the problem on your
own, not in MAL with Drop down Menus to help you solve problem.
TA office hours and extra office hours are posted on Class Website.
Good luck with your studying for Midterm 1.