ACBU 2223- Final Exam Guide - Comprehensive Notes for the exam ( 41 pages long!)

• School: Fordham University
• Department: Accounting
• Course: ACBU 2223
• Professor: John Savignano

Document Summary

Not bound by gaap/ifrs or any prescribed format. Income will be higher in good years compared to companies w/ lower proportion of fixed costs. Low fixed cost structure greater stability in income across good & bad years: operating leverage. Differences between variable & absorption costing & computing unit product costs under each method: variable costing. Product costs: direct materials, direct labor, & variable manufacturing overhead. Period costs: fixed manufacturing overhead & variable & fixed selling & administrative expenses: absorption costing. Product costs: direct materials, direct labor, & fixed & variable manufacturing overhead. Period costs: variable & fixed selling & administrative expenses. Keys to segmented income statements: contribution format should be used b/c separates fixed from variable costs & enables calculation of contribution margin, traceable fixed costs should be separated from common fixed costs to enable calculation of segment margin. Segment margin: computed by subtracting traceable fixed costs of segment from its contribution margin, best gauge of long-run profitability of segment.