ACC 222 - Cost Accounting

1. Identify cost terms.
   1. Differentiate between product and period costs
   2. Distinguish controllable cost from noncontrollable cost
   3. Discuss cost flow in a production environment
   4. Explain cost reaction to change in activity
   5. State the differences between direct cost and indirect cost
   6. Define often used cost terms
2. Develop predetermined overhead rates
   1. Identify the benefits of using predetermined overhead rates
   2. Calculate overhead rates
   3. Analyze causes of under and overapplied overhead
   4. Differentiate plantwide versus departmental overhead rates
   5. Compute under and overapplied overhead
   6. State alternative capacity measures.
   7. Apply activity-based costing
3. Contrast the processes available for allocating service department costs
   1. Analyze pros and cons of allocating service department costs
   2. List acceptable allocation bases
   3. Practice allocation based on step method, direct method, and the algebraic method
4. Appraise a job-order costing system
   1. Assign costs to products in a job-order system
   2. Illustrate the flow of cost in a job-order system
   3. Explain the documentation involved in a job-order system
   4. Prepare the journal entries used to accumulate cost in a job-order system
   5. Demonstrate the allocation of overhead in a job order system
5. Explain a process costing system
   1. Allocate cost to products in a process costing system
   2. Differentiate between the process costing from job-order costing
   3. Calculate the equivalent units of production using the weighted average and FIFO methods of process costing
   4. Determine unit cost using weighted average and FIFO methods of process costing
   5. Illustrate the application of standard costs in a process costing system
   6. Prepare a production and cost report for a process costing system
   7. Journalize the entries for a process costing system
6. Evaluate the effects of spoilage
   1. Examine the effect of spoilage on equivalent units and cost per unit
   2. Analyze the handling of spoilage in a job-order costing system
   3. Differentiate between normal and abnormal spoilage
   4. Discuss why lost units occur in manufacturing processes
   5. Relate the procedures used to allocate rework costs of defective units
7. Compare joint costs and by-product costs allocation methods
   1. Differentiate between a joint costs and by-product costs
   2. Explain at what point joint costs are identifiable
   3. Allocate joint product costs to products using sales value at split-off, net realizable value at split-off, and physical measurement
   4. Assess the benefits of sales value at split-off and net realizable value at split-off
   5. Illustrate the treatment of by-products in a job ­order system
   6. Journalize the entries for joint cost and by­product cost allocations
8. Summarize standard costing material and labor standards
   1. Express why standard cost systems are used
   2. Describe how standards are set for materials and labor
   3. Calculate material and labor variances
   4. Explain the use of variance analysis to control evaluate the performance of a company
   5. Journalize the recording of variances
9. Develop flexible budgets
   1. Describe how flexible budgets are used by managers to plan and control overhead costs
   2. Express how variable and fixed overhead costs are best controlled
   3. Illustrate the differences among the approaches to overhead analysis
   4. Calculate overhead variances
   5. Record overhead variances
   6. Explain the differences between a controllable variance and noncontrollable variance
10. Generate a master budget
    1. Explain the importance of a budget
    2. State how strategic and tactical planning relate to budgeting
    3. Prepare various schedules in a master budget
    4. Identify the budgeting process steps
    5. Blend the various budgets to create a master budget
11. Compare absorption and variable costing
    1. State the differences between absorption and variable costing
    2. Compute the impact on net income when changes in sales and/or production levels occur under absorption and variable costing
    3. Analyze if one accounting system can provide both absorption and variable costing financial, statements
    4. Prepare both absorption and variable financial statements
12. Interpret cost-volume-profit analysis
    1. Relate why and how the breakeven point is computed
    2. Describe the application of breakeven analysis to a business
    3. Use cost-volume-profit analysis to make decisions
    4. Illustrate how margin of safety and operating leverage concepts are used in business
    5. Relate the underlying assumptions of cost-volume profit
    6. Explain how costs, revenues, and contribution margin interact with changes in activity base