Cost Accounting notes (1)

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Cost Accounting .
Chapter 1
Management accounting measures , analyzes, and reports financial and no financial information that helps managers make decisions to fulfill the goals of an organization. Financial accounting focuses on reporting to external parties such as investors, government agencies, banks and suppliers. It measures and records business transactions and provides financial statements that are based on GAAP. Cost accounting measures, analyzes, and reports financial and no financial information relating to cost of acquiring or using resources in an organization.
Value -chain analysis : sequence of business functions in which customer usefulness is added to products and services . 1. Research and development 2. Design of products, services, or processes 3. Production 4. Marketing 5. Distribution 6. Customer service .
Supply chain describes the flow of goods , services, and information from the initial sources of materials and services to the delivery of products to consumers, regardless of whether those activities occur in the same organization or in other organizations .
Five step decision making process :
1. Identify the problem and uncertainties.
2. Obtain information.
3. Make predictions about the future.
4. Make decisions by choosing among alternatives.
5. Implement the decision, evaluate performance , and learn.
Steps 1-4 are collectively referred to as planning . Planning comprises selecting organization goals, predicting results under various alternative ways of achieving those goals, deciding how to attain them. Most important planning tool is budget , quantitative expression of a proposed plan of action by management and is an aid to coordinating what needs to be done to implement that plan.
The comparison of actual performance to budgeted performance is the control or post decision role of information. Control comprises taking actions that implement planning decisions, deciding how to evaluate performance, and providing feedback and learning to help future decision making.
Chapter 2 - Cost terms and purposes .
Direct costs of a cost object are related to the particular cost object and can be traced to it in an economically feasible (cost-effective) way.
Cost tracing is used to describe the assignment of direct costs to a particular cost object.
Indirect costs of a cost object are related to the particular cost object but cannot be traced to it in an economically feasible (cost effective) way.
Cost allocation is used to describe the assignment of indirect costs to a particular cost object.
Cost assignment is a general term that encompasses both tracing direct costs and allocating indirect costs.
Factors affecting direct/indirect cost classification :
Materiality of the cost in question - the smaller the amount of cost, the more immaterial the cost is, the less likely that it is economically feasible to trace the cost to a particular cost object.
Available information- gathering technology . Design of operations.
Variable cost changes in total in proportion to changes in the related level of total activity or volume .
Fixed cost remains unchanged in total for a given time period , despite wide changes in the related level of total activity or volume.
Cost driver is a variable, such as the level of activity or volume, that causally affects costs over a given time span .
Relevant range is the band of normal activity level or volume in which there is a specific relationship between the level of activity or volume and the cost.
Cost of goods sold :
Beginning finished goods inventory
Cost of goods manufactured
Cost of goods available for sale
Deduct: ending finished goods inventory
Cost of goods sold
Schedule of cost of goods manufactured
Direct materials:
Beginning inventory
Add: purchases of DM
= Cost of DM available for use
Deduct: ending inventory
Direct materials used
Direct manufacturing labor
Manufacturing overhead costs
= Manufacturing costs incurred
Add: Beginning work in process inventory
Total manuf. Costs to account for
Deduct: ending work in process inventory
= Cost of goods manufactured
Prime costs are all direct manufacturing costs. Prime costs = direct material + direct labor.
Conversion costs are all manuf. Costs other than direct material costs. Costs incurred to convert DM into finished product. Conversion costs = DL + MOH
Overtime premium and idle time classified as indirect labor costs.
Product cost is the sum of the costs assigned to a product for a specific purpose .
Chapter 3 - Cost-Volume-Profit analysis
CVP analysis examines the behavior of total revenues , total costs and operating income as changes occur in the units sold, the selling price , the variable cost per unit , or the fixed costs of a product.
Breakeven point is that quantity of output sold at which total revenues equal total costs. Breakeven in units = Fixed costs/ contribution margin per unit. Breakeven revenues = fixed costs/CM%.
Target operating income. Qty of units required to sold = (fixed costs + target op income) / CM per unit.
Revenues needed to earn = Fixed costs + target op income / CM%.
Target operating income = target net income / (1-tax rate ). Revenues - VE - FE = Target net income/ (1-tax rate).
Qty of units required to be sold = FE+ (Target net income/(1- tax rate))/CM per unit.
Sensitivity analysis is a what-if technique that managers use to examine how an outcome will change
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Cost Accounting notes #1 Cost Accounting notes #2 Cost Accounting notes #3 Cost Accounting notes #4 Cost Accounting notes #5 Cost Accounting notes #6
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Notes of \\\"Cost Accounting: A Managerial Emphasis\\\", 13th edition, by Horngren, Datar, Foster, Rajan and Ittner. Chapters 1, 2, 3, 7, 8, 11, 14, 15, 16, 18, 21..
Cost Accounting notes

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Sisukord

  • Replace
  • Difference (1-2)
  • Actual units of
  • Budgeted
  • Sales-Mix
  • -0.80) x
  • - 0.20) x
  • Total sales-mix
  • Budgeted sales
  • Budgeted CM per
  • Sales-quantity
  • -890000) units x
  • x
  • -890000) x
  • x
  • Total sales
  • physical units)
  • Step 2 Equivalent units
  • Direct materials
  • Conversion Costs
  • Total production
  • Direct
  • Conversion
  • WIP, beginning
  • Costs added in current period
  • Total costs to account for
  • Cost incurred to date
  • Divided by equivalent units of
  • /10000
  • /9000
  • Cost per equivalent unit
  • Assignment of costs
  • Good units completed and
  • Costs before adding normal
  • *10.90)
  • Normal spoilage (700 units)
  • *10.90)
  • Total cost of good units completed
  • Abnormal spoilage (300 units)
  • *8.85)
  • *10.90)
  • Work in process, ending (2000
  • *8.85)
  • *10.90)
  • Total costs accounted for
  • Present value factors

Teemad

  • Cost Accounting
  • Chapter 1
  • Management accounting
  • Financial accounting
  • Cost accounting
  • Value-chain analysis
  • Supply chain
  • Five step decision making process
  • Planning
  • budget
  • Control
  • Chapter 2 - Cost terms and purposes
  • Direct costs
  • Cost tracing
  • Indirect costs
  • Cost allocation
  • Cost assignment
  • Factors affecting direct/indirect cost classification
  • Variable cost
  • Fixed cost
  • Cost driver
  • Relevant range
  • Cost of goods sold
  • Schedule of cost of goods manufactured
  • Prime costs
  • Conversion costs
  • Product cost
  • Chapter 3 - Cost-Volume-Profit analysis
  • CVP analysis
  • Breakeven point
  • Target operating income
  • Sensitivity analysis
  • Margin of safety
  • Operating leverage
  • Sales mix
  • Chapter 7 - Flexible budgets, direct-cost variances, management control
  • Management by exception
  • Static-budget variance
  • Sales-volume variance
  • Flexible-budget variance
  • Price variance
  • Efficiency variance
  • Benchmarking
  • standard cost
  • Chapter 8 - Flexible budgets, overhead cost variances, management control
  • Standard costing
  • Variable overhead flexible-budget variance
  • Variable overhead efficiency variance
  • Variable overhead spending variance
  • Fixed overhead flexible-budget variance
  • Production volume variance
  • Production volume var
  • Chapter 11 - Relevant costs
  • decision model
  • Relevant costs
  • Quantitative factors
  • qualitative factors
  • One-time-only Special Orders
  • Make-or-Buy decisions
  • differential cost
  • Opportunity cost
  • Product-mix decisions with capacity constraints
  • Adding or dropping costumers or business segments/branches, relevant-revenue and relevant-cost analysis
  • Equipment replacement decisions
  • Chapter 14 - cost allocation, customer-profitability analyses, sales-variance analysis
  • Purpose of allocating indirect costs
  • Criteria to guide cost- allocation decisions
  • Customer profitability analysis
  • Customer-cost analysis
  • sales-quantity
  • variance
  • Sales-mix variance
  • Sales-quantity variance
  • Market-share and market-size variances - page 519
  • Chapter 15 - allocation of support-department costs, common costs, and revenues
  • Support department
  • Single-rate method
  • Dual-rate method
  • supply of capacity
  • direct method, step-down method, reciprocal method. Direct method
  • Step-down method
  • Reciprocal method
  • Stand-alone cost-allocation method
  • Incremental cost-allocation method
  • stand alone method, incremental method. Stand-alone revenue-allocation method
  • Incremental revenue
  • allocation method
  • Chapter 16 - cost allocation: joint products and byproducts
  • Split off point
  • Separable costs
  • Joint products
  • byproducts
  • Allocating joint costs
  • Sales value at split off method
  • Physical measure method
  • The NRV method
  • Constant Gross margin % NRV method
  • Sell-or-process further decision
  • sales method delays recognition of byproducts
  • Chapter 18 - spoilage, rework, scrap
  • Rework
  • Scrap
  • Normal spoilage
  • Abnormal spoilage
  • Five-Step procedure for Process costing with spoilage
  • Weighted average method of process costing with spoilage
  • FIFO method and spoilage
  • Standard-costing method
  • Normal spoilage common to all
  • jobs
  • rework is normal
  • Abnormal rework
  • Recognizing scrap at the time of its sale
  • Recognizing scrap at the time of its production
  • excluding depreciation effect)

Kommentaarid (1)

AnneDanne profiilipilt
AnneDanne: jah
17:15 18-01-2016


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