Cost Accounting

What you'll learn

• Explain the purposes a cost accounting system serves, choose among job, process and operation costing, and judge when a cost system needs to be refined or redesigned.
• Prepare FIFO and weighted-average production cost reports, including transferred-in costs and materials added part-way through a process, and explain why FIFO suits performance evaluation.
• Account for normal and abnormal spoilage, rework and scrap in process and job costing systems, consistent with ASC 330, and analyze rework decisions with relevant costs.
• Design an activity-based costing system using the cost hierarchy, compare its product costs with plantwide and departmental rates, and use activity-based management to reduce costs.
• Apply time-driven activity-based costing with capacity cost rates and time equations, identify unused capacity, and analyze customer profitability and the whale curve.
• Allocate support department costs with the direct, step-down and reciprocal methods, use dual and budgeted rates, allocate common costs, and apply FAR Part 31 and the Cost Accounting Standards to contract costing.
• Allocate joint costs by physical measure, sales value at split-off, net realizable value and constant gross-margin methods, account for by-products, and make sell-or-process-further decisions.
• Set currently attainable standards and compute and interpret materials and labor price, efficiency, mix and yield variances.
• Compute and interpret variable and fixed overhead variances, explain the effect of the denominator level, record standard cost journal entries and dispose of variances at year-end.
• Compute selling-price, sales-mix, sales-quantity, market-size and market-share variances, and compare absorption, variable and throughput costing in light of US GAAP and the UNICAP rules.
• Estimate cost functions with regression, apply learning curves, and use target costing, life-cycle costing, the cost of quality, backflush costing and environmental costing in strategic cost management.
• Diagnose and redesign an organization's cost system, quantify the resulting product, customer and capacity information, and plan an ethical, well-governed implementation.