Objectives: Chapter Twenty-Three
The following learning objectives for this chapter map to the curriculum design for our online university-level courses. These courses are offered through Utah State University, and result in the awarding of up to 6 hours of highly transferrable college credit. To learn more, check out the classroom link.
Variable costing versus absorption costing.
Understand absorption (full) costing logic, and know that it is required by GAAP.
Understand variable costing logic, and know how it is beneficial in the management decision process.
Be able to prepare an absorption costing income statement.
Be able to prepare a variable costing income statement.
Be able to demonstrate how inventory fluctuations cause income to differ under absorption vs. variable costing.
Define a business segment and identify issues related to measuring segment income.
Be able to prepare contribution income statements for business segments.
Thoroughly understand the concepts of controllable contribution margin, segment margin, and nontraceable costs.
Know the basic content of externally reported segment data.
Measures of residual income.
Understand the concept of residual income and how it is calculated.
Concepts in allocating service department costs.
Be able to distinguish between direct and step methods of allocating service department costs.
Leveraging modern information systems to enable better decisions.
Distinguish between line item and object of expenditure presentations of data.
Know how management can use line item data.
Know how management can use object of expenditure data.