Please submit 3 important ideas that people need to learn to prepare for the Final Exam. Again, there should not be repetitive subjects posted and please do not post after taking the exam.
Week 5 Discussion
The three important ideas for the final exams are as follows:
- Responsibility Accounting needs to be understood clearly, which covers the various types of responsibility centers viz. cost center, revenue center, profit center, and investment center. The differentiation between static and flexible budgets should be learned as well along with the standard costs analyzing the variances in the standard cost. The formulas for material variances, labor variances, and overhead variances should be learned for solving problems based on standard costing. Lastly, the variances need to be reported as well. All these are interconnected topics and hence need to be gone through together.
- The other most important topic for the exam is learning about strategic business segments which means the segmentation of business to be managed properly by the respective managers of the different segments. How multilevel segment reports are to be prepared must be analyzed as well. The concept of transfer pricing and the conflicts arising from this should be understood properly. The return on investment, the economic value added, and the balanced scorecard are important concepts to be studied too.
- The concept of capital budgeting and capital expenditure is to be studied along with different capital budgeting models viz. net present value, internal rate of return, payback period, and accounting rate of return. How to calculate the net present value, the internal rate of return, the payback period, and the accounting rate of return is very important to be learned. Then there is the need for evaluating the strengths and weaknesses of the alternative capital budgeting model. The evaluation is required to be done for all the capital budgeting models. Different risk analysis techniques are to be learned. How depreciation provides the tax shield is a very interesting concept that needs to be gone through as well. The concept of investment tax credit is to be learned as well. Lastly, the time value of money which includes the future value, present value, annuities, and unequal cashflows along with their calculation procedures is a very important topic for the exam. These three ideas for the exam cover almost all the relevant topics which I find vital for the examination.
