Accounting Tools

APRIL 25, 2024

Related AccountingTools Courses Activity-Based Costing Cost Accounting Fundamentals Example of a Downward Demand Spiral Tsunami Products manufactures several types of shower heads. After a detailed analysis of margins, the company’s cost accountant recommends to management that the dual shower head model be cancelled.

Cost Accounting 75

Cost Accounting Accounting Accounting 75

Accounting Tools

MAY 12, 2024

Related AccountingTools Courses Cost Accounting Fundamentals Financial Analysis Related Articles Allowable Costs Committed Cost Direct Cost Incremental Cost Unavoidable Cost

Financial Analysis 75

Financial Analysis Cost Accounting Tax Accounting 75

Accounting Tools

MAY 3, 2024

Related AccountingTools Courses Activity-Based Costing Cost Accounting Fundamentals Related Article Manufacturing Support Costs This department sources goods and services for the manufacturing operation, including contract negotiations and order monitoring.

Cost Accounting 40

Cost Accounting Accounting Accounting 40

Accounting Tools

FEBRUARY 15, 2024

Total cost is less applicable to short-term decision making, where it is more likely that only variable costs will be considered. The alternative definitions for total cost are noted below. In general, it is the most comprehensive view of invested funds.

Cost Accounting 72

Cost Accounting Financial Reporting Budgeting Tax 72

Accounting Tools

APRIL 28, 2024

In accounting, the split-off point should be clearly defined, so that all separable costs incurred thereafter can be separately tracked and assigned to specific products.

Cost Accounting 40

Cost Accounting Accounting Accounting 40

Accounting Tools

NOVEMBER 1, 2023

Related Courses Accounting for Inventory Cost Accounting Fundamentals How to Audit Inventory Direct material is the physical items built into a product. The direct materials concept is used in cost accounting , where this cost is separately classified in several types of financial analysis.

Financial Analysis 75

Financial Analysis Cost Accounting Budgeting Auditing 75

Accounting Tools

MAY 5, 2024

These include the costs incurred for a supplier or customer. The allocation is useful for tracking the cost of dealing with another entity. Related AccountingTools Courses Activity-Based Costing Cost Accounting Fundamentals Related Articles First Stage Allocation Stage 1 Allocation

Customer Service 40

Customer Service Cost Accounting Accounting Accounting 40

Accounting Tools

SEPTEMBER 7, 2023

Related Courses Accounting for Inventory Cost Accounting Fundamentals How to Audit Inventory What is a Cost of Goods Manufactured Schedule? The cost of goods manufactured schedule is used to calculate the cost of all items produced during a reporting period.

Financial Statements 75

Financial Statements Cost Accounting Auditing Financial Accounting 75

Accounting Tools

APRIL 17, 2024

Related AccountingTools Course Cost Accounting Fundamentals Comparing Direct and Indirect Labor The difference between direct labor and indirect labor is that only labor involved in the hands-on production of goods and services is considered to be direct labor. Related Article How to Calculate a Labor Rate

Cost Accounting 75

Cost Accounting Accounting Accounting 75

Accounting Tools

MAY 7, 2024

The flow of costs concept is less applicable in a services firm, where most costs are incurred and charged to expense at the same time. Further, the costs incurred to operate all production machinery and other aspects of the production operation are added to the flow of costs.

Cost Accounting 40

Cost Accounting Accounting Accounting 40

Accounting Tools

MAY 1, 2024

Based on this information, the stage 1 allocation is to divide the number of resets into the total cost, to derive a cost per machine reset of $40. Related AccountingTools Courses Activity-Based Costing Cost Accounting Fundamentals Related Articles First Stage Allocation Stage 2 Allocation

Computation 40

Computation Cost Accounting Accounting Accounting 40

Accounting Tools

JULY 27, 2023

Related Courses Activity-Based Costing Activity-Based Management Cost Accounting Fundamentals What is Costing? Costing is any system for assigning costs to an element of a business.

Cost Accounting 75

Cost Accounting Tax Accounting Accounting 75

Accounting Tools

APRIL 24, 2024

The same approach works in reverse, where the variable component of the cost will be eliminated when the activity level declines below a certain amount. Consequently, it is best to concentrate on fully understanding a small number of these costs very well, rather than having a cursory knowledge of the cost behavior of a large number of them.

Cost Accounting 75

Cost Accounting Budgeting Billing Accounting 75

Accounting Tools

OCTOBER 23, 2023

Related Courses Cost Accounting Fundamentals What is the Relative Sales Value Method? The relative sales value method is a technique used to allocate joint costs based on the prices at which products will be sold. However, product margins may still vary, depending on the costs incurred by each product after the allocation point.

Cost Accounting 75

Cost Accounting Accounting Accounting 75

Accounting Tools

FEBRUARY 5, 2024

Related AccountingTools Courses Accounting for Inventory Activity-Based Costing Cost Accounting Fundamentals Related Articles Accounting for Manufacturing Businesses Fixed Manufacturing Overhead Applied Manufacturing Cost Accounting Manufacturing Overhead Manufacturing Overhead Rate

Cost Accounting 40

Cost Accounting Accounting Accounting 40

Accounting Tools

MAY 16, 2024

Related AccountingTools Course Cost Accounting Fundamentals Standard Costs and Variance Analysis Related Articles Accounting for Variances Controllable Variance Cost Variance Analysis Variance Analysis Variance Report

Cost Accounting 40

Cost Accounting Accounting Accounting 40

Accounting Tools

NOVEMBER 1, 2023

Related Courses Accounting for Inventory Cost Accounting Fundamentals What is Factory Cost? Factory cost refers to the total cost required to manufacture goods. This concept is the basis for several cost accounting analyses.

Cost Accounting 75

Cost Accounting Accounting Accounting 75

Accounting Tools

MARCH 26, 2024

Another example of an unavoidable cost is a long-term purchase commitment, such as a 20-year deal by a utility to purchase coal from a mining company. Related AccountingTools Course Cost Accounting Fundamentals Related Articles Avoidable Cost Committed Cost Fixed Cost Legacy Cost Non-Controllable Cost

Cost Accounting 40

Cost Accounting Accounting Accounting 40

Accounting Tools

JUNE 12, 2023

Related Courses Cost Accounting Fundamentals Financial Analysis Operations Management How to Calculate Efficiency The efficiency equation is a comparison of the work output from an operation to the work input to that same operation. The concept has been most thoroughly formalized in cost accounting , as noted below.

Financial Analysis 75

Financial Analysis Cost Accounting Accounting Accounting 75

Accounting Tools

APRIL 6, 2024

For example, if a business pays a salary to its marketing manager, this cost is immediately classified as a current period expense, and so is charged to expense as incurred. Related AccountingTools Course Cost Accounting Fundamentals Related Articles Committed Cost Explicit Cost Incurred Cost Legacy Cost Sunk Cost

Cost Accounting 40

Cost Accounting Accounting Accounting 40

Accounting Tools

MAY 2, 2024

Related AccountingTools Courses Activity-Based Costing Cost Accounting Fundamentals Related Articles Cost Allocation Methods Reciprocal Method Terms Similar to the Sequential Method The sequential method is also called the step allocation method.

Cost Accounting 40

Cost Accounting Accounting Accounting 40

Accounting Tools

MARCH 7, 2024

In this case, it makes sense for the contractor to over-estimate the estimated cost, in order to have enough buffer in its pricing bid to ensure that it can earn a profit on the deal.

Budgeting 40

Budgeting Cost Accounting Accounting Accounting 40

Accounting Tools

MAY 13, 2024

Related AccountingTools Courses Activity-Based Costing Cost Accounting Fundamentals Examples of Service Departments Examples of service departments are as follows: Maintenance department. Related Articles Cost Allocation Method Reciprocal Method Reciprocal Services Sequential Method

Purchase Order 40

Purchase Order Billing Cost Accounting Budgeting 40

Accounting Tools

FEBRUARY 10, 2024

Finally, a business might incur quality inspection costs as part of its batch processing, which involves inspecting units both during and after a production run, to see if they meet the producer’s quality standards. If so, the total batch cost is aggregated and divided by the number of units produced to arrive at a unit cost.

Cost Accounting 40

Cost Accounting Accounting Accounting 40

Accounting Tools

JUNE 21, 2023

Related Courses Accounting for Inventory Cost Accounting Fundamentals What are Conversion Costs? Conversion costs are those production costs required to convert raw materials into completed products. Therefore, the conversion cost per unit for the month was $6.80

Cost Accounting 75

Cost Accounting Payroll Tax Accounting 75

Accounting Tools

MARCH 29, 2024

If the overhead application rate is instead based on a standard application rate, then the amount applied may be higher or lower than the actual cost incurred.

Cost Accounting 40

Cost Accounting Accounting Accounting 40

Accounting Tools

APRIL 29, 2024

In some cases, they will find that the real problem is an incorrectly-derived standard cost that generates unfavorable variances even when there is no underlying problem. It is much easier to charge standard costs to jobs than to charge actual costs to them. Related Articles Is Standard Costing Allowable in GAAP and IFRS?

Budgeting 40

Budgeting Cost Accounting Billing Accounting 40

Accounting Tools

MARCH 25, 2024

For example, a business acquired its headquarters building for $5 million ten years ago, but could not replace it for less than $8 million today, due to increased construction costs and the imposition of much more restrictive building codes than had been the case ten years ago.

Financial Statements 40

Financial Statements Cost Accounting Accounting Accounting 40

Accounting Tools

OCTOBER 22, 2023

Related Courses Cost Accounting Fundamentals What is Variable Cost? A variable cost is a cost that varies in relation to either production volume or the amount of services provided. If no production or services are provided, then there should be no variable costs.

Cost Accounting 75

Cost Accounting Accounting Accounting 75

Accounting Tools

MARCH 25, 2024

Related AccountingTools Courses Accounting for Inventory Activity-Based Costing Cost Accounting Fundamentals Related Article Batch-Level Activities This includes equipment calibration, as well as the loss of materials during test runs.

Cost Accounting 40

Cost Accounting Accounting Accounting 40

Accounting Tools

JUNE 8, 2023

Related Courses Accounting for Inventory Activity-Based Costing Cost Accounting Fundamentals Job costing involves the detailed accumulation of production costs attributable to specific units or groups of units. Costs are likely to be accumulated at the department level, and no lower within the organization.

Record Keeping 75

Record Keeping Billing Cost Accounting Accounting 75

Accounting Tools

MAY 10, 2024

There tends to be a lower level of oversight for overhead costs, so they can linger within a business, even when they are no longer needed. It is possible for overhead costs to arise even in the absence of unit volume, but to increase further when unit volumes increase; these are called semi-variable overhead costs.

Cost Accounting 40

Cost Accounting Accounting Accounting 40

Accounting Tools

DECEMBER 28, 2023

The cost of both types of indirect labor can be fully loaded with the costs of benefits and payroll taxes for financial analysis or cost accounting purposes, since these additional costs are closely associated with the indirect labor positions.

Financial Analysis 40

Financial Analysis Cost Accounting Payroll Tax 40

Accounting Tools

DECEMBER 22, 2023

Related AccountingTools Course Cost Accounting Fundamentals Related Articles Cost Allocation Methods Manufacturing Overhead Rate Overhead Allocation Overhead Application The Underabsorption and Overabsorption of Overhead Volume-Based Allocation

Cost Accounting 40

Cost Accounting Accounting Accounting 40

Accounting Tools

NOVEMBER 8, 2023

Related Courses Activity-Based Costing Cost Accounting Fundamentals What are Reciprocal Services? This back-and-forth swapping of services can be taken into consideration when calculating the allocation of overhead costs.

Cost Accounting 40

Cost Accounting Accounting Accounting 40

Accounting Tools

OCTOBER 20, 2023

Related Courses Activity-Based Costing Cost Accounting Fundamentals What is the Reciprocal Method? The reciprocal method uses simultaneous equations to allocate the costs incurred by service departments to other departments; allocations are also made between the service departments.

Cost Accounting 40

Cost Accounting Accounting Accounting 40

Accounting Tools

MARCH 6, 2024

Consequently, there is usually an emphasis on shortening equipment setup times in order to reduce setup costs and increase throughput. Related AccountingTools Courses Accounting for Inventory Cost Accounting Fundamentals Related Articles Batch Cost Differential Cost Incremental Cost Production Costs

Cost Accounting 40

Cost Accounting Accounting Accounting 40