Midterm Review

Chapter 6- budgeting
• Functions/advantages of budget
• Types of budgets- operating vs financing
• Operating budgets- sales, production, DM usage/purchases, DL, MOH,
Non-manufacturing expenses, budgeted income statement
• Financing budgets- Cash, balance sheet
• Kaizen, Activity based
• Responsibility accounting
Chapter 7 and 8
Flexible budgets and standard costing for Direct /indirect cost
• Definition/calculation
• Static budget, flexible budget
• Static budget variance, flexible budget variance, sales volume variance
• Direct material price/efficiency
• Direct labour price/efficiency
• Variable overhead spending/efficiency variance
• Fixed overhead spending/production volume variance
• Interpretation of the above variances
• Journal entries are NOT required
Chapter 15/16- revenue allocation, sales mix
and sales quantity variance
• Revenue allocation method- standalone, incremental, sharpley
• Sales volume variance is divided into sales mix and sales quantity
variance
Chapter 13 strategy/balance scorecard/
strategic profitability analysis
• Strategy- cost leader/ differentiation
• Balance scorecard- (financial, customer, internal business and learning and
growth)
• Profitability analysis (break down the change in income between two years
into- growth, price recovery, productivity components)

• Growth-how much change in income due to output change

• Price recovery-how much change in income due to output/input price level
change
• Productivity-how much change in income due to efficiency of input used
• Review the appendix of each chapter as summary
Chapter 7,8,15/16,13 especially