ACCT 2302 Midterm: Midterm #2 cheat sheet

• School: Northeastern University
• Department: Accounting
• Course: ACCT 2302
• Professor: Lloyd John D.Tanlu

Document Summary

Condensed nic = (,000 ,000) ,00 = (,000) Skim nib = (,000 ,000) ,000 = ,000. Oh > actual oh = overapplied (higher selling price with cost-plus pricing) and vice versa. Oh rate = total estimated oh/estimated cost driver. Actual costing: exact (after period is over, use actual dm, dl, and oh. Normal costing: forecast, not always accurate (must adjust it, use actual dm/dl, & estim. Pros of abc: more accurate product costs, identify and manage non-value added activities, analysis of profitability. Cons of abc: not allowed by gaap for external reporting. *more indirect cost pools result in: greater accuracy in cost determination, more expensive cost determination process. *operational characteristics: oh rates are high/increasing, diverse product lines, dl is small % of total costs. *decision making characteristics: acct department spends a lot of time on special cost projects, product line profit margins are difficult to rationalize.