Introductory Managerial Accounting

What you'll learn

• Explain the purpose of managerial accounting, how it differs from financial accounting, its role in planning, directing and controlling, and the professional and ethical standards that apply to management accountants in the United States, including the CMA and CPA credentials and the IMA Statement of Ethical Professional Practice.
• Classify costs as direct or indirect, product or period, and variable or fixed, compute prime and conversion costs, and prepare a schedule of cost of goods manufactured and a manufacturer's cost of goods sold.
• Describe cost behavior patterns and the relevant range, estimate cost formulas with account analysis, the high–low method and least-squares regression, and prepare a contribution margin income statement.
• Apply cost-volume-profit analysis to find break-even points, target profits before and after tax, the margin of safety, operating leverage and multiple-product break-even, and test plans with what-if analysis and simulation.
• Cost jobs using predetermined overhead rates, record the flow of costs in a job-order system, dispose of underapplied or overapplied overhead, and compare plantwide and departmental rates.
• Prepare a weighted-average production cost report using equivalent units, account for transferred-in costs, compare the FIFO method and distinguish normal from abnormal spoilage.
• Explain the cost hierarchy and why volume-based allocation distorts product costs, assign overhead with activity-based costing, and use activity information for pricing, process improvement and customer profitability.
• Prepare and reconcile variable and absorption costing income statements, explain the incentive to overproduce, and explain why US GAAP and federal tax rules require absorption (full) costing.
• Identify relevant costs and revenues and analyze special orders, make-or-buy, keep-or-drop, constrained-resource, sell-or-process-further and equipment replacement decisions, including qualitative factors and target costing.
• Prepare a master budget for a manufacturer, including sales, production, materials, labor, overhead, selling and administrative and cash budgets, and discuss the behavioral aspects of budgeting.
• Prepare flexible budgets, compute and interpret sales-volume, flexible-budget, materials, labor, variable overhead and fixed overhead variances, and apply management by exception.
• Evaluate responsibility centers with segment margins, return on investment and residual income, determine transfer price ranges, use non-financial measures, and assemble a planning and control package.