Standard

ACC 202 – Principles of Accounting II

Course Description:

Emphasizes a fundamental understanding of accounting principles as they relate to providing information for managerial decision-making. Topics include the fundamentals of cost accounting systems, cost behavior and analysis, product pricing, budgeting and capital investment analysis 

Competency Areas:		Hours:
Cost accounting systems		Class	5
Cost behavior and analysis		D. Lab	0
Differential Analysis and Product pricing		P. Lab/O.B.I.	0
Budgeting		Credit	5
Capital investment analysis
Prerequisite:	ACC 201
Corequisite:

Course Guide

Competency	After completing this section, the student will:	Hours
		Class	D. Lab	P. Lab/ O.B.I.
COST ACCOUNTING		20	0	0
General principles	Distinguish between financial accounting and managerial accounting.
	Illustrate similarities and differences between manufacturing and merchandising entities.
	Distinguish between cost of merchandise sold and cost of goods sold.
	Differentiate between job order and process cost accounting and give examples of items produced under each system.
Job order cost accounting	Summarize the process of accounting for materials and labor, including the determination of direct material and direct labor costs.
	Define factory overhead and list the major sources of charges to this account.
	Name the controlling accounts and subsidiary ledgers normally used in job order cost accounting and describe the relationships between the accounts and subsidiary ledgers.
	Record journal entries for materials, factory labor, and factory overhead charges.
	Prepare journal entries for goods completed and transferred to finished goods and cost of goods sold.
Process cost accounting	Identify factory overhead costs and explain the allocation of these costs to departmental factory overhead accounts.
	List the major elements of conversion costs.
	Explain the calculation of unit conversion costs.
	Calculate and interpret the accounting for completed and partially completed units under the FIFO method.
	Summarize the data on the cost of production report and use the report for decision making.
Journal entries	Record journal entries for the flow of materials and conversion costs between departments.
	Record journal entries for the allocation and application of factory overhead and determine the amount and nature of the balances in departmental factory overhead accounts.
Just-in-time processing	Contrast just-in-time processing with conventional manufacturing processes and give examples of the impact of just-in-time processing on manufacturing enterprises.
COST BEHAVIOR AND ANALYSIS		10	0	0
Principles of cost behavior	Classify cost by their behavior as variable costs, fixed costs or mixed costs.
Cost-volume-profit relationships	Compare the contribution margin the contribution margin ratio and explain how they are useful to management.
	Using unit contribution margin, determine the break-even point and the volume necessary to achieve a target profit.
	Calculate the break-even point for a business selling multiple products.
	Compute the margin of safety and the operating leverage and explain the usefulness of these calculations to management.
	List the assumptions that underlie cost-volume-profit analysis.
DIFFERENTIAL ANALYSIS AND PRODUCT PRICING		6	0	0
Differential analysis reports	Prepare differential analysis reports for decisions involving leasing or selling equipment, discontinuing unprofitable operational segments, manufacturing versus purchasing parts, replacing operable fixed assets, production of final versus intermediate products and accepting additional business at non-traditional prices.
Establishing product selling prices	Determine the selling price of a product using the total cost, product cost and variable cost concepts.
Establishing product pricing in bottleneck production environments	Calculate the profitability of multiple products in a bottleneck production environment and identify the product or product combinations that maximize profitability.
BUDGETING		10	0	0
Nature and objectives of budgeting	Define budgeting. List the major objectives of budgeting and its impact on human behavior.
Budget period and procedures	Illustrate budget periods.
	Describe the basic elements of the budgeting process.
	Describe the two major types of budgeting (static and flexible).
	State the primary reasons for using flexible budgets.
	Make distinctions between the master budget and its components.
Budget preparation and reporting	Prepare the income statement and balance sheet budgets for a manufacturing business.
Performance evaluation using standard costs	Describe standard costs and identify the types of standards and how they are established.
	Illustrate the process of determining standard costs and how they are used in budgeting.
	Calculate and analyze direct materials price and quantity variances.
	Calculate and analyze direct labor rate and time variances.
	Calculate and analyze factory overhead controllable and volume variances from standard.
	Prepare journal entries for standard cost application.
	Prepare an income statement inclusive of variances from standard.
	Describe and illustrate examples of non-financial performance measures.
	Illustrate the use of standards in non-manufacturing entities.
Evaluating the performance of decentralized operations	Describe the advantages and disadvantages of decentralized operations.
	Prepare responsibility accounting reports for cost centers, profit centers and investments centers.
	Calculate the rate of return on investment and the residual income for an investment center.
	Describe how market price, negotiated price and cost price approaches to transfer pricing may be used in decentralized operations.