Cost Accounting Manufacturing Cost by kxw17218

VIEWS: 166 PAGES: 11

More Info



       Cost Accounting
       Prerequisite: ACCT-1210

       This course covers accounting for manufacturing cost procedures and concerns
       including job-order and process cost systems; managerial and cost reports;
       budgeting and standard costing; planning and control; cost-volume-profit
       analysis; cost estimations; and product costing and pricing. Managerial
       emphasis is stressed throughout the course.
       Offered spring semester only.



       A. Summarize and apply financial, cost, and managerial accounting terms,
          concepts, and principles. [GE Goals: 1 & 2]

       B. Analyze, record and report transactions for manufacturing businesses. [GE
          Goals: 2 & 3]

       C. Demonstrate the ability to use cost information to support operating decisions
          and strategic decisions regarding products, customers and technology. [GE
          Goals 1 & 2]

       D. Prepare reports for use by management in decision-making. [GE Goals: 2 &

       E. Demonstrate the ability to understand how accounting can facilitate planning,
          control, and decision-making. [GE Goals: 1 & 2]

       F. Describe cost accounting and its relationship to managerial and financial
          accounting. [GE Goal: 1]

       G. Solve business problems using information provided by cost and managerial
          accounting. [GE Goals: 2 & 3]


       A. Text
                                                               COST ACCOUNTING
            1. Horngren, Datar, and Foster. Cost Accounting, A Managerial
                  Emphasis. 13th edition. Prentice-Hall. (Chapters 1-9, 11-12, & 17)

      B. Student Study Guide for above textbook

            1. Dudley W. Curry. Prentice-Hall

      C. Display and PowerPoint materials

      D. Handouts


      A. Cost Accounting Fundamentals

            1. The Accountant's Role in the Organization

            2. An Introduction to Cost Terms and Purposes

            3. Cost-Volume-Profit Analysis

            4. Job Costing

            5. Activity-Based Costing and Activity-Based Management

            6. Process Costing

      B. Tools For Planning and Control

            1. Master Budget and Responsibility Accounting

            2. Flexible Budgets, Direct-Cost Variances, and Management Control

            3. Flexible Budgets, Overhead Cost Variances, and Management Control

            4. Inventory Costing and Capacity Analysis

      C. Cost Information for Decisions

            1. Decision Making and Relevant Information

            2. Pricing Decisions and Cost Management
                                                                    COST ACCOUNTING

       A. Lecture highlighting points in text and relating them anecdotally to the
          business world

       B. Class discussion

       C. Group projects

       D. Presentation and discussion of solutions to assignments

       E. This class is offered in an online format


       A. Unit Tests and Comprehensive Final Exam

       B. Daily work

              1. Quizzes

              2. Assignments

              3. Group projects

       C. Attendance

              1. In accordance with school policy

              2. All missed work must be made up


       A. The Accountant’s Role in the Organization

              1. Describe how cost accounting supports management accounting and
                 financial accounting

              2. Describe how management accountants affect strategic decisions

              3. Distinguish between the planning and control decisions of managers

                                                        COST ACCOUNTING
      4. Distinguish among the problem-solving, scorekeeping, and attention-
         directing roles of a management accountant

      5. Describe the set of business functions in the value chain

      6. Describe three guidelines management accountants follow in
         supporting managers

      7. Understand how cost accounting fits into an organization’s structure

      8. Understand the importance of professional ethics to management

B. An Introduction to Cost Terms and Purposes

      1. Define and illustrate a cost object

      2. Distinguish between direct costs and indirect costs

      3. Explain variable costs and fixed costs

      4. Interpret unit costs with caution

      5. Distinguish among manufacturing-, merchandising-, and service-sector

      6. Describe the three categories of inventories commonly found in
         manufacturing companies

      7. Differentiate between inventoriable costs and period costs

      8. Explain why different ways of computing product costs are appropriate
         for different purposes

C. Cost-Volume-Profit Relationships

      1. Understand basic cost-volume-profit (CVP) assumptions

      2. Explain essential features of CVP analysis

      3. Determine the breakeven point and output to achieve target operating
         income using the equation, contribution margin, and graph methods
                                                         COST ACCOUNTING
      4. Incorporate income tax considerations into CVP analysis

      5. Explain CVP analysis in decision making and how sensitivity analysis
         can help managers cope with uncertainty

      6. Use CVP analysis to plan variable and fixed costs

      7. Apply CVP analysis to a multiproduct company

      8. Adapt CVP analysis to multiple cost driver situations

      9. Distinguish between contribution margin and gross margin

D. Job Costing

      1. Describe the building block concepts of costing systems

      2. Distinguish between job costing and process costing

      3. Outline a seven-step approach to job costing

      4. Distinguish actual costing from normal costing

      5. Track the flow of costs in a job-costing system

      6. Prorate end-of-period under- or over-allocated manufacturing overhead
         costs at the end of the fiscal year using alternative methods

      7. Apply variations of normal costing

E. Activity-Based Costing and Activity-Based Management

      1. Present three guidelines for refining a costing system

      2. Distinguish between simple and activity-based costing systems

      3. Describe a four-part cost hierarchy

      4. Cost products or services using activity-based costing (ABC)

      5. Use ABC systems for activity-based management (ABM)

                                                            COST ACCOUNTING
      6. Compare ABC and department-costing systems

      7. Evaluate the costs and benefits of implementing ABC systems

F. Process Costing

      1. Identify the situations in which process-costing systems are

      2. Describe the five steps in process costing

      3. Calculate equivalent units and understand how to use them

      4. Prepare journal entries for process-costing systems

      5. Use the weighted-average method of process costing

      6. Use the first-in, first-out (FIFO) method of process costing

      7. Incorporate standard cost into process-costing systems

      8. Apply process-costing methods to situations with transferred-in costs

G. Master Budget and Responsibility Accounting

      1. Describe the master budget and explain its benefits

      2. Describe key advantages of budgets

      3. Prepare the operating budget and its supporting schedules

      4. Use computer-based financial planning models in sensitivity analysis

      5. Explain kaizen budgeting and its importance for cost management

      6. Illustrate an activity-based budgeting approach

      7. Describe responsibility centers and responsibility accounting

      8. Explain how controllability relates to responsibility accounting

H. Flexible Budgets, Direct-Cost Variances, and Management Control
                                                              COST ACCOUNTING
      1. Distinguish a static budget from a flexible budget

      2. Develop a flexible budget and compute flexible-budget variances and
         sales-volume variances

      3. Compute the price and efficiency variances for direct-cost categories

      4. Explain why standard costs are often used in variance analysis

      5. Explain how managers use variances

      6. Perform variance analysis in activity-based costing systems

      7. Describe benchmarking and how it can be used in cost management

I. Flexible Budgets, Overhead Cost Variances, and Management Control

      1. Explain similarities and differences in the planning of variable overhead
         costs and the planning of fixed overhead costs

      2. Identify the features of a standard costing system

      3. Compute variable overhead spending and efficiency variances

      4. Explain how the variable overhead efficiency variance differs from the
         efficiency variance for a direct cost

      5. Compute the budgeted fixed overhead rate

      6. Explain two concerns when interpreting the production-volume
         variance as a measure of the economic cost of unused capacity

      7. Show how the 4-variance analysis approach reconciles the actual
         overhead incurred with the overhead amounts allocated during the

      8. Calculate overhead variances in activity-based costing

J. Inventory Costing and Capacity Analysis

      1. Identify what distinguishes variable costing from absorption costing

                                                       COST ACCOUNTING
      2. Prepare income statements under absorption costing and variable

      3. Explain differences in operating income under absorption costing and
         variable costing

      4. Understand how absorption costing can provide undesirable incentives
         for managers to build up finished goods inventory

      5. Differentiate throughout costing from variable costing and absorption

      6. Describe the various denominator-level capacity concepts that can be
         used in absorption costing

      7. Describe how attempts to recover fixed costs of capacity may lead to
         price increases and lower demand

      8. Explain how the choice of the denominator level affects the production-
         volume variance

K. Decision Making and Relevant Information

      1. Use the five-step decision process to make decisions

      2. Differentiate relevant costs and revenues from irrelevant costs and
         revenues in any decision situation

      3. Distinguish between quantitative factors and qualitative factors in

      4. Identify two potential problems that should be avoided in relevant-cost

      5. Describe the opportunity-cost concept and explain why it is used in
         decision making

      6. Describe the key concept in choosing which among multiple products
         to produce when there are capacity constraints

      7. Discuss the key factor managers must consider when adding or
         dropping customers and segments

                                                                COST ACCOUNTING
            8. Explain why the book value of equipment is irrelevant in equipment-
               replacement decisions

            9. Explain how conflicts can arise between the decision model used by a
               manager and the performance model used to evaluate the manager

      L. Pricing Decisions and Cost Management

            1. Discuss the three major influences on pricing decisions

            2. Distinguish between short-run and long-run pricing decisions

            3. Price products using the target-costing approach

            4. Apply the concepts of cost incurrence and locked-in costs

            5. Price products using the cost-plus approach

            6. Use life-cycle product budgeting and costing when making pricing

            7. Describe two pricing practices in which non-cost factors are important
               when setting price

            8. Explain the effects of antitrust laws on pricing

      Academic integrity forms a fundamental bond of trust between colleagues, peers,
      teachers, and students, and it underlies all genuine learning. At WNCC, there is
      no tolerance for plagiarism or academic dishonesty in any form, including
      unacknowledged "borrowing" of proprietary material, copying answers or papers,
      or passing off someone else’s work as one's own.

      A breach of ethics or act of dishonesty can result in:
         • failure of a paper or exam within a course
         • failure of an entire course (blatant plagiarism, cheating on a test or quiz)
         • academic suspension or expulsion from the college

      Western Nebraska Community College is committed to providing equal access to
      educational opportunities. If you believe that you qualify under the Americans
      with Disabilities Act (ADA), please contact the Director of Counseling (308-635-
                                                         COST ACCOUNTING
6090) as soon as possible to begin a process of documentation review and
determination for appropriate accommodation or adaptive strategies.



To top