Cost Accounting Course

Michael Porter Competitive Strategies, Cost Accountant, Management Functions, IMA.

Balanced Scoreboard

Direct material, Direct Labor, Manufacturing Overhead, Period Cost, Product Cost, Indirect Cost, Cost driver, Conversion Cost, Prime cost, Sunk Cost, Mixed Cost, Variable Cost, Fixed Cost, Step Cost

Cost Volume Profit Analysis
Topics covered

What if analysis, CVP Analysis, Contribution Margin, Contribution Margin Ratio, Contribution Margin Percentage, Breakeven point, Break-even point, Break-even Revenue.

Schedule of Cost of Goods manufactured.
Topics covered

Raw Material Used, Direct Material Used, Manufacturing Overhead Cost, Cost of Goods Sold, Finished Goods Iventory.

Job Cost Sheet, Material Requisition, Control Account, Subsidiary Accounts, Cost flow, Under-applied and Over-applied.

Under-applied Overhead, Over-applied Overhead, Predetermined Overhead Rate, Estimated Overhead, POHR, Allocation Base, Cost Driver, Normal Costing System.

Weighted Average Method, Equivalent Unit of Production, FIFO Method of Process Costing, Applied Overhead.

Example of Activity Based Costing, Cost Pool, Activities cost Pool, Product margin, Traditional Allocation Method, Overhead Allocation.

Variable Costing and Absorption Costing
Topics covered

Absorption costing, common fixed cost, segment margin, variable costing, traceable fixed cost.

Budgeting Process
Topics covered

Cash budget, Master budget, Production budget, sales budget, Manufacturing overhead budget, Direct materials budget, Direct labor budget

Variance Analysis
Topics covered

Labor efficiency variance, Labor rate variance, Materials price variance, Materials quantity variance, Price variance Quantity variance, Standard cost per unit, Standard hours per unit, Variable overhead efficiency variance, Variable overhead rate variance

Cost Allocation
Topics covered

Reciprocal Method, Direct Method, Step Method, Service Department

Decision Cost: Special Orders
Topics covered

Relevant Cost, Irrelevant Cost, Special Order, Idle Capacity

Joint Product and ByProduct Costings
Topics covered

Joint Product, By Product, Byproduct, Relative Sales Value, Net Realizable Value, Split-off Point, Joint Production Cost, Separable Cost.

Understanding Cost Accounting

Cost accounting is used by a company’s internal management team to identify all variable and fixed costs associated with the production process. It will first measure and record these costs individually, then compare input costs to output results to aid in measuring financial performance and making future business decisions. There are many types of costs involved in cost accounting, which are defined below.

Types of Costs

• Fixed costs are costs that don’t vary depending on the level of production. These are usually things like the mortgage or lease payment on a building or a piece of equipment that is depreciated at a fixed monthly rate. An increase or decrease in production levels would cause no change in these costs.
• Variable costs are costs tied to a company’s level of production. For example, a floral shop ramping up their floral arrangement inventory for Valentine’s Day will incur higher costs when it purchases an increased number of flowers from the local nursery or garden center.
• Operating costs are costs associated with the day-to-day operations of a business. These costs can be either fixed or variable depending on the unique situation.
• Direct costs are costs specifically related to producing a product. If a coffee roaster spends five hours roasting coffee, the direct costs of the finished product include the labor hours of the roaster and the cost of the coffee beans.
• Indirect costs are costs that cannot be directly linked to a product. In the coffee roaster example, the energy cost to heat the roaster would be indirect because it is inexact and difficult to trace to individual products.