STUDY GUIDE FOR EXAM ON CHAPTERS 12, 13, AND 14

Direct vs indirect costs:

Which can be traced directly to units of product?

Which are pooled, and why?

Why are overhead costs allocated and not charged directly?

Be able to identify the most rational base for allocating overhead costs to a cost object.

Cost objects can be what?

The process of dividing a total cost into parts and assigning it to cost objects is known as what?

A factor having a "cause and effect" relationship with a cost object is called what?

What are relevant (avoidable) costs?

What determines that a cost is relevant?

What are unit-level, batch-level, product-level, and facility-level costs?

What is a special order decision?

What is an outsourcing decision?

What is a segment elimination decision?

What is an asset replacement decision?

What are sunk costs? Are they relevant to decision making?

What is an opportunity cost?

Expressing plans for a business in financial terms in known as what?

What are the benefits of budgeting?

What are the three levels of planning? What are they composed of? What time period do they cover?

What is the budgeting technique that provides for employee input?

What are the operating budgets, and what order are they prepared in? What is included in each?