4: Process Costing
Differences and similarities between a job order costing system and
a process costing system: the entries in a process costing system are generally
the same as in a job order system except that manufacturing overhead
does not need to be applied based on a predetermined rate and extra
entries are needed to show the transfer of the product between departments.
Preparation of a production report under the weighted average method including
calculation of quantity schedule, equivalent units, cost
per equivalent unit, amount to be transferred to next department or
finished goods inventory, and amount to be reported on balance sheet
for ending work in process inventory.
5: Cost-Volume-Profit Relationships
Be able to conduct cost-volume-profit (CVP) analysis under various
scenarios: breakeven, target net income, margin of safety, and sales
Although the book shows various ways of calculating the same answer,
you can use the method you feel most comfortable with.
Understand the concept and calculation of operating leverage.
Determine the changes in of net income that result from a change in
sales price, variable costs, fixed costs, or a combination thereof.
CHAPTER 6: Variable Costing and Segment Reporting: Tools for Management
There is only one multiple choice from this chapter about the difference between variable costing versus costing systems.
7: Master Budgeting
Identify the advantages of budgeting.
Know what each of the budgets in Exhibit 7-1 represent as well as
their interrelationships and the chronological order in which the
budgets are prepared.
Be able to prepared the following budgets and schedules: sales budget,
schedule of cash collections from sales, production budget, direct
materials budget, manufacturing overhead budget, and cash budget (financing
You will not be required to prepare a complete budgeted income statement
nor a budgeted balance sheet.