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 16, 2024

This cost becomes the transferred-in cost of the Engines department, which is the starting cost before the costs of the engine and installation labor are included. Related AccountingTools Course Cost Accounting Fundamentals Related Articles Equivalent Units of Production Process Costing System

Cost Accounting 40

Cost Accounting Accounting Accounting 40

Accounting Tools

JULY 19, 2023

Related Courses Cost Accounting Fundamentals What is a Material Variance? Material variance has two definitions, one relating to direct materials and the other to the size of a variance. They are noted below.

Financial Statements 40

Financial Statements 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

JULY 13, 2023

Related Courses Accounting for Inventory Cost Accounting Fundamentals What is Full Costing? Full costing is used to determine the complete and entire cost of something. The concept is most commonly used for recording the full cost of inventory in the financial statements.

Financial Reporting 40

Financial Reporting Cost Accounting Financial Statements Collections 40

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.

Cost Accounting 75

Cost Accounting Budgeting Billing Accounting 75

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

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

JUNE 9, 2023

Related Courses Accounting for Inventory Cost Accounting Fundamentals What is Job Costing? Job costing involves the accumulation of the costs of materials, labor, and overhead for a specific job. An alternative use is to see if any excess costs incurred can be billed to a customer.

Cost Accounting 40

Cost Accounting Billing Invoicing Budgeting 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

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

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

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. Bills the production department for labor and equipment consumed during the maintenance of machinery.

Purchase Order 40

Purchase Order Billing Cost Accounting Budgeting 40

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

MAY 2, 2024

Work down through the stack of ranked service departments, allocating the costs of each service department to the departments they served. Related AccountingTools Courses Activity-Based Costing Cost Accounting Fundamentals Related Articles Cost Allocation Methods Reciprocal Method

Cost Accounting 40

Cost Accounting Accounting Accounting 40

Accounting Tools

FEBRUARY 11, 2024

To calculate the total normal costs of these units, Everly’s accountant combines all overhead, materials, and labor costs, which are as follows: ($100,000 overhead + $250,000 materials + $50,000 labor) = $400,000 low-clung bidet cost ($30,000 overhead + $120,000 materials + $24,000 labor) = $174,000 high bidet cost Related AccountingTools Courses Accounting (..)

Financial Reporting 74

Financial Reporting Cost Accounting Budgeting Accounting 74

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

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.

Cost Accounting 75

Cost Accounting Payroll Tax Accounting 75

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. They are as follows: Management by exception.

Budgeting 40

Budgeting Cost Accounting Billing Accounting 40

Accounting Tools

MAY 2, 2024

The costs incurred by a service center are allocated to all using departments at the end of each reporting period, using either a standard or actual overhead rate. Related AccountingTools Courses Cost Accounting Fundamentals Cost Management Guidebook Related Article Service Department

Billing 40

Billing Budgeting Cost 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

OCTOBER 23, 2023

Replacement Cost in Insurance Policies Replacement cost is a common term used in insurance policies to cover damage to a company's assets. The definition is critical, since the insurer is committing to pay the insured entity for the replacement cost of covered assets, if those assets are damaged or destroyed.

Budgeting 40

Budgeting Accounting Accounting Cost Accounting 40

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.

Cost Accounting 40

Cost Accounting Accounting Accounting 40

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

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

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.

Cost Accounting 75

Cost Accounting Accounting Accounting 75

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

APRIL 20, 2023

Related Courses Cost Accounting Fundamentals What is Full Cost? Full cost is the aggregation of all costs associated with a product or other cost object. These costs include both the direct costs and indirect costs of production, but do not include selling, general and administrative expenses.

Cost Accounting 75

Cost Accounting Accounting Accounting 75

Accounting Tools

DECEMBER 26, 2023

With the low cost structure that goes with a low overhead rate, a business can consistently underprice its competitors, which usually results in increased market share. There are a wide range of possible allocation measures, such as direct labor hours, machine time, and square footage used.

Budgeting 75

Budgeting Cost Accounting Financial Reporting Accounting 75

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

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

MARCH 5, 2024

Related AccountingTools Courses Accounting for Inventory Cost Accounting Fundamentals Related Articles Abnormal Spoilage Normal Spoilage Scrap This means that any inventory losses are written off in the same reporting period in which they were initially discovered.

Cost Accounting 40

Cost Accounting Accounting Accounting 40

Accounting Tools

JUNE 11, 2023

Related Courses Accountants' Guidebook Bookkeeping Guidebook Cost Accounting Fundamentals What is the Cost of Sales? The cost of sales is the accumulated total of all costs used to create a product or service, which has been sold.

Cost Accounting 75

Cost Accounting Accounts Payable Accounts Payable Bookkeeping 75

Accounting Tools

APRIL 8, 2024

However, if the standard profit margin is set too high, it may not be possible to develop very many products within the cost constraint. These changes reduce the overall cost of the design by $100, allowing the company to earn its target profit of 40% per unit sold. The steps it follows are noted below. Monitor the product.

Cost Accounting 40

Cost Accounting Accounting Accounting 40

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

OCTOBER 7, 2023

Related Courses Accountants’ Guidebook Bookkeeping Guidebook Cost Accounting Fundamentals What is a Deferred Expense? A deferred expense is a cost that has already been incurred, but which has not yet been consumed.

Financial Statements 75

Financial Statements Cost Accounting Financial Reporting Accounting Software 75

Accounting Tools

NOVEMBER 3, 2023

Related Courses Cost Accounting Fundamentals What are Step Costs? A step cost is a cost that does not change steadily with changes in activity volume, but rather at discrete points. A step cost is a fixed cost within certain boundaries, outside of which it will change.

Cost Accounting 76

Cost Accounting Budgeting Accounting Accounting 76