MANAGERIAL ACCOUNTING (Chapter 1)
Characteristics of Managerial Accounting
Primary Users Internal users
Reports Internal reports issued as needed
Purpose Special purpose for a particular user
Content Pertains to subunits, may be detailed, use of relevant
data
Veri cation No independent audits
MANAGERIAL COST CONCEPTS AND COST BEHAVIOUR
ANALYSIS (Chapter 2)
Types of Manufacturing Costs
Direct materials Raw materials directly associated with nished
product
Direct labour Work of employees directly associated with
turning raw materials into nished product
Manufacturing
overhead
Costs indirectly associated with manufacture of
nished product
Types of Cost Behaviours
Variable costs Vary in total directly and proportionately with
changes in activity level
Fixed costs Remain the same in total regardless of change in
activity level
ACTIVITY-BASED COSTING (Chapter 5)
Overhead Costs
Activity Cost Pools
Assign to Products
Divide by Cost Drivers
Activity-based costing involves the following four
steps:
1. Identify and classify the major activities involved
in the manufacture of speci c products, and
allocate the manufacturing overhead costs to the
appropriate cost pools.
2. Identify the cost driver that has a strong correla-
tion to the costs accumulated in the cost pool.
3. Compute the overhead rate for each cost driver.
4. Assign manufacturing overhead costs for each
cost pool to products, using the overhead rates
(cost per driver).
DECISION-MAKING: COST-VOLUME-PROFIT (Chapter 6)
CVP Income Statement Format
Total Per Unit
Sales $xx $xx
Variable cost xx xx
Contribution margin xx $xx
Fixed costs xx
Net income $xx
Contribution
margin per unit
Unit selling
price 2Unit variable
costs
Break-even
point in units
Fixed
costs 4Unit contribution
margin*
Break-even
Fixed
5
5
5
RAPID REVIEW
Chapter Content
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