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Ch 20: Concepts in Managerial Accounting

About This Chapter

Refresh your understanding of managerial accounting concepts with this informative chapter. You'll find video lessons and short quizzes that provide an excellent way to study for a test, complete your homework or supplement what you're learning in class.

Concepts in Managerial Accounting - Chapter Summary

In this chapter, you'll review important concepts in managerial accounting. Topics covered include managerial accounting and decision-making, responsibility accounting, cost-volume-profit analysis and activity-based costing. After completing this chapter, you should be able to:

  • Outline managerial accounting functions
  • Use the formula for activity-based costing
  • Differentiate between absorption and variable costing in managerial decision making
  • Detail irrelevant and relevant costs for decision-making
  • Give an example of cost-volume-profit analysis
  • Discuss the computation used for market-based transfer pricing
  • Identify the limitations of responsibility accounting

We've made it easy to study at your convenience by making these lessons accessible 24 hours a day on your mobile device or computer. Easily navigate any video lesson by using the video tabs feature found in the Timeline. You can also create helpful study guides that highlight key concepts and terms by using our printable lesson transcripts.

7 Lessons in Chapter 20: Concepts in Managerial Accounting
Managerial Accounting Functions

1. Managerial Accounting Functions

Managerial accounting is used to improve the efficiency of the management process by focusing on management planning, cost controls and financial monitoring to ensure the financial success of departments and the overall company.

Activity-Based Costing: Definition, Formula & Examples

2. Activity-Based Costing: Definition, Formula & Examples

Manufacturing companies rely on product cost data to set product sales prices and determine if products are producing profits. This lesson covers activity-based costing and describes how to assign overhead costs to products using this method.

Managerial Decision Making: Absorption vs. Variable Costing

3. Managerial Decision Making: Absorption vs. Variable Costing

Companies often have many decisions to make regarding setting prices. In this lesson, we look at two ways to set prices, one using absorption costing and the other using variable costing.

Relevant & Irrelevant Costs for Decision-Making

4. Relevant & Irrelevant Costs for Decision-Making

In accounting, there are relevant and irrelevant costs. Relevant costs include differential, avoidable, and opportunity costs. Irrelevant costs include sunk and fixed overhead costs. In this lesson, we will learn about these and calculate them.

Cost-Volume-Profit Analysis: Definition & Examples

5. Cost-Volume-Profit Analysis: Definition & Examples

In this lesson, we'll explore cost-volume profit analysis, which companies use to help them figure out how many products to make, and at how much to sell them for in order to make their desired profit. We'll also discuss contribution margins.

Market-Based Transfer Pricing: Definition & Computation

6. Market-Based Transfer Pricing: Definition & Computation

Market-based transfer pricing is, generally speaking, the best form of transfer pricing available to companies. In this lesson, we'll discuss how it works and why it is the preferred choice.

Responsibility Accounting: Benefits & Limitations

7. Responsibility Accounting: Benefits & Limitations

Unlike other accounting systems which focus on departments or divisions, responsibility accounting tracks the performance of each individual. As you might imagine, this has unique advantages and disadvantages.

Final Exam
Status
Certified Internal Auditor (CIA): Exam Prep & Study Guide
This course currently has no final exam ready
Chapter Exam
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Concepts in Managerial Accounting
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