BU247- Midterm Exam Guide - Comprehensive Notes for the exam ( 13 pages long!)
Document Summary
Financial accounting: retrospective, primarily orientated to external stakeholders, such as investors, creditors, regulators, and tax authorities, stresses the form in which it is communicated. Management accounting: both retrospective and prospective, primarily orientated to needs of employees and managers, no prescribed form or rules about its content. Plan-do-check-act cycle or deming cycle: developed by quality expert, w. edwards deming, a systematic and recursive way to develop, implement, monitor, evaluate, and change a course of action. Management accounting supports decision making: cost information is pervasive throughout decision-making situations, pricing, product planning, budgeting, performance evaluation, contracting. Selling price - vc = cm - fc = profit. Variations of cvp equation: to calculate sales needed to achieve target profit, required unit sales, = (target profit + fixed cost) / contribution margin per unit. Impact of income taxes: required unit sales, = [target profit / (1 tax rate) + fixed costs] / contribution margin per.
