IENG 216 Cost Accounting. Flexible Budgeting  Geared towards a range of activities  Dynamic rather than static.

Slides:

Advertisements

Similar presentations

Asst. Prof. Dr. Mahmut Ali GÖKÇE, Izmir University of Economics Spring, 2007 (c) 2001 Contemporary Engineering Economics 1 Understanding.

Advertisements

Copyright © 2006, The McGraw-Hill Companies, Inc.McGraw-Hill/Irwin Activity-Based Costing: A Tool to Aid Decision Making Chapter Eight.

4 - 1 Job Order Costing Chapter Learning Objective 1 Describe the building-block concepts of costing systems.

16-1 Copyright  Houghton Mifflin Company. All rights reserved. Chapter 16 Operating Costs and Cost Allocation, Including Activity-Based Costing Belverd.

©2003 Prentice Hall Business Publishing, Cost Accounting 11/e, Horngren/Datar/Foster Job Order Costing Chapter 4.

Managerial Accounting An Overview. Role in Decision-Making  Provides economic and financial information to management  Focus on resources, costs, profit.

Is the accounting for process costing significantly different from job order costing? 1.Yes 2.No.

Activity-Based Costing: A Tool to Aid Decision Making

Cost Concepts - 1 COST CONCEPTS AND CLASSIFICATIONS Fixed vs Direct vs Variable Indirect Functional vs Behavioral.

4 - 1 Job Order Costing – Chapter 4 Describe the building-block concepts of costing systems. Learning Objective 1.

Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 4 Activity-Based Costing Systems.

© The McGraw-Hill Companies, Inc., 2002 McGraw-Hill/Irwin Management Accounting: A Business Partner Chapter 16.

1 TRADITIONAL PRODUCT COSTING METHODS Accounting Principles II AC Fall Semester, 1999.

The Master Budget and Flexible Budgeting

Product Costing Process Costing Job Order Allocates costs to products

©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton Chapter 13 Job Costing Systems.

© The McGraw-Hill Companies, Inc., 2005 McGraw-Hill/Irwin 17-1 JOB ORDER COST SYSTEMS AND OVERHEAD ALLOCATIONS Chapter 17.

Managerial and Cost Accounting. Know the major differences between financial accounting and Managerial Accounting Given a set of factory overhead data,

Needles Powers Crosson Principles of Accounting 12e Costing Systems: Job Order Costing 18 C H A P T E R ©human/iStockphoto.

McGraw-Hill/Irwin 3-1 Product Costing and Cost Accumulation in a Batch Production Environment 3 Chapter Three.

18 Costing Systems: Job Order Costing Principles of Accounting 12e

© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin Financial & Managerial Accounting The Basis for Business Decisions FOURTEENTH EDITION Williams.

ENGM 661 Engineering Economics for Managers Cost Accounting.

5 C H A P T E R Operating Budgets.

Cost Concepts and Cost Allocation

The McGraw-Hill Companies, Inc. 2006McGraw-Hill/Irwin 4 Activity-Based Costing Systems.

© 2016 Pearson Education, Inc.

IE 475 Advanced Manufacturing Costing Techniques

McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., Cost Allocation and Performance Measurement Chapter 21 Modified from Publisher Provided.

© The McGraw-Hill Companies, Inc., 2007 McGraw-Hill/Irwin Chapter 21 Cost Allocation and Performance Measurement.

Management Accounting

Principles of Cost Accounting 15 th edition Edward J. VanDerbeck © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated,

Process Cost Accounting. PROCESS COST ACCOUNTING After studying this chapter, you should be able to: 1 1 Understand who uses process cost systems. 2 2.

Module 6: Process Cost Systems ACG 2071 Created by M. Mari Fall

1 Module19 Assigning Indirect Costs: Activity-Based Costing (omit pp to 19-13)

Managerial Accounting

Cost Management ACCOUNTING AND CONTROL

Module 9. Cost Accumulation 1.  Direct /Indirect Cost  Cost Allocation  Cost Apportionment  Cost Driver  Cost Absorbtion  Treatment of Over/Under.

© The McGraw-Hill Companies, Inc., 2002 Slide 22-1 McGraw-Hill/Irwin 22 Cost Allocation and Performance Measurement.

Principles of Cost Accounting 15 th edition Edward J. VanDerbeck © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated,

Copyright © 2012 The McGraw-Hill Companies, Inc. PowerPoint Authors: Susan Coomer Galbreath, Ph.D., CPA Charles W. Caldwell, D.B.A., CMA Jon A. Booker,

Accounting for Factory Overhead

Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Management Accounting: Information for managing and creating value 4e By Kim Langfield-Smith 11-1.

CHAPTER 13 COST ACCOUNTING AND REPORTING SYSTEMS McGraw-Hill/Irwin©The McGraw-Hill Companies, Inc., 2002.

Chapter 5 Activity-Based Cost Management Systems.

© 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license.

1 Chapter 7- Cost Management Systems-ABC. M11-Chp-08-1-Cost-Mgt-Systems-ABC Summer, Edited May 23, Copyright © 2011, Dr. Howard Godfrey.

CHAPTER FIVE Responsibility Accounting and Transfer Pricing.

Activity Based Costing Nancy R. Mangold Professor, Department of Accounting California State University, East Bay.

©2003 Prentice Hall Business Publishing, Cost Accounting 11/e, Horngren/Datar/Foster Learning Objective Distinguish actual costing from normal costing.

© 2013 John Wiley & Sons, Ltd, Accounting for Managers, 1Ce, Ch 11 1.

© The McGraw-Hill Companies, Inc., 2002 McGraw-Hill/Irwin Accounting Systems For Measuring Costs Chapter 17.

Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Job Order Cost Systems and Overhead Allocations Chapter 17.

McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., Cost Allocation and Performance Measurement Chapter 21.

Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 4 Activity-Based Costing Systems.

Chapter 4 Job Order Costing McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 4-3 Learning Objectives Explain the types.

24-1 The use of budgets in controlling operations is known as budgetary control.   Takes place by means of budget reports which compare actual results.

Chapter 3 Basic Cost Concepts McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 3-3 Learning Objectives Explain the cost.

McGraw-Hill/Irwin © 2007 The McGraw-Hill Companies, Inc., All Rights Reserved CHAPTER 13 McGraw-Hill/Irwin © 2007 The McGraw-Hill Companies, Inc.,

Accounting: What the Numbers Mean

IENG 216 Cost Accounting.

Accounting: What the Numbers Mean

Financial & Managerial Accounting 2002e

Chapter 4 Chapter 3 Job Order Costing Job Order Costing.

Basic Cost Terminology

Preface The use of modern manufacturing practices (such as automation, computer control machines, robotics, JIT) can significantly change the structure.

Cost Accounting and Reporting Systems

The Master Budget and Flexible Budgeting

Financial Statements: Basic Concepts and Comprehensive Analysis

Presentation transcript:

IENG 216 Cost Accounting

Flexible Budgeting  Geared towards a range of activities  Dynamic rather than static

Flexible Budgeting  Geared towards a range of activities  Dynamic rather than static Need to understand rudiments of cost accounting  Job order costing  Process costing  Activity based costing

Job Order Costing  K-Corp collects its cost data by the job order cost system. For each job, they know the amount and material costs. Direct labor costs are $9.50 per hour. Factory overhead rate is computed at $4.50 per hour.

Process Costing  A Company produces and sells a chemical product. During a given month the company purchases 15,000 gallons of chemicals at a cost of $30, ,000 gallons are completed and transferred to the next department. 5,000 gallons are 20% complete as to conversion. Factory overhead for the month is $20,000.

Activity Based Costing  Historically direct labor & material constitute significant elements of cost of goods sold  Current overhead costs dominate the cost of production  Activity-based costing is designed to meet the challenge of a changing cost mix by associating manufacturing costs with activities which drive them

ABC Two-Step Process  Define Cost Pools (usually support functions)  Identify Cost Drivers (trace costs to the cost pools)

ABC Example  A multinational firm uses traditional accounting to allocate manufacturing and management support costs. However, travel is typically allocated on the basis of employees at plants in France, Germany, Italy, and Greece. Consequently, some plants are likely generating much more management travel than others. The ABC system is chosen to more precisely allocate travel costs to major product lines.

ABC Example

1. Determine Cost Pool

ABC Example 2. Determine Cost Driver

ABC Example Driver Distribution

ABC Example Allocation of Costs

Value Added  Examines the difference between the net operating profit (after tax) and the cost of capital  Four ways to create value for shareholder  increase profit margins without increasing capital  invest in projects that earn more than cost of capital  free-up capital than earns less than cost of capital  use debt to reduce the cost of capital

Value Added  Which is the better firm from a shareholder’s point of view?

Value Added  Firm B has largest Economic Value Added (EVA)

Value Added  Firm B has largest Economic Value Added (EVA) Maximizing ROI is not the right objective !