Accounting 202

Study Guide

Chapters 1-3

I. Multiple-choice (50 Points)

a. There will be 25 questions worth 2 points each.

b. Know the similarities and differences between managerial and financial accounting.

c. Know the differences and be able to identify product costs and period costs.

d. Be able to identify costs by product, period, selling and general categories.

e. Be able to identify and distinguish between fixed and variable costs.

f. Know how to calculate total and per unit costs.

g. Be acquainted with cost-volume-profit (CVP)relationships including graphical presentations.

h. Know the terms related to CVP analysis and how to compute each (for example, contribution margin).

i. Know what is meant by sensitivity analysis.

j. Be familiar with operating leverage and how good leverage magnifies profits with small increases in revenue.

II. Short exercises (50 Points)

a. (15 Points) You will be given 15 examples of costs and asked whether each cost is a fixed or variable cost.

b. (15 Points) Calculation of total cost and per unit cost from given information and units of production.

c. (20 Points) You will be given data and asked to calculate amounts for key variables in the CVP analysis format (for example, contribution margin in $sales and $ per unit.

Good luck and study hard!

..Dr. Putman