• Explain the meaning of cost behavior, and define and describe fixed and variable costs
• Define and describe mixed costs
• Discuss mixed costs into their fixed and variable components
• Explain the difference between absorption and variable costing
• Describe the differences between job-order costing and process costing, and identify the types of firms that would use each method
• Compute the predetermined overhead rate, and use the rate to assign overhead to units or services produced
• Identify and set up the source documents used in job-order costing
• Describe the cost flows associated with job-order costing
• Explain why functional (or volume)-based costing approaches may produce distorted costs
• Explain how an activity-based costing system works for product costing
• Describe activity-based customer costing and activity-based supplier costing
• Explain how activity-based management can be used for cost reduction