EAC 3331 Cost Accounting

Lecture: Introduction and Course Overview

Lecture: Types of Accounting, Strategic Decisions, the Value Chain, Decision Making, and Ethics

Lecture: Cost Terms, Total and Unit Costs, and Aspects of Inventory

Lecture: Income Statement and Schedule of Cost of Goods Sold: Different Costs for Different Purposes

Lecture: Cost of Goods Manufactured Problem

Outcomes

Lecture: Focus on Contribution Margin, Breakeven Point, Target Income, and Cost-Volume-Profit (CVP)

Lecture: Contribution Margin Income Statement Problem

Outcomes

After completing this module, students will beable to

• Explain the features of cost-volume-profit (CVP) analysis
• Determine the breakeven point and output level needed to achieve a target operating income
• Explain how income taxes affect CVP analysis
• Explain CVP analysis in decision making and how sensitivity analysis helps managers cope with uncertainty
• Use CVP analysis to plan variable and fixed costs
• Apply CVP analysis to a company producing multiple products
• Adapt CVP analysis to situations in which a product has more than one cost driver

Lecture: Focus on Job Costing

Lecture: Job Costing Problem

Lecture: Focus on Activity-Based Costing Systems (ABC)

Lecture: Activity-Based Costing Problem

Outcomes

After completing this module, students will beable to

• Describe the building-block concepts of costing systems
• Distinguish job costing from process costing
• Outline the seven-step approach to job costing
• Distinguish actual costing from normal costing
• Track the flow of costs in a job-costing system
• Dispose of underallocated or overallocated manufacturing overhead costs at the end of the fiscal year using alternative methods
• Apply variations from normal costing
• Explain how broad averaging undercosts and overcosts products or services
• Present three guidelines for refining a costing system
• Distinguish between simple and activity-based costing systems
• Describe a four-part cost hierarchy
• Explain cost products or services using activity-based costing
• Explain how activity-based costing systems are used in activity-based management
• Compare activity-based costing systems and department costing systems
• Evaluate the costs and benefits of implementing activity-based costing systems

Lecture: Focus on Process Costing and the Weighted Average Inventory Costing Method

Lecture: Focus on Process Costing and the Weighted Average Inventory Costing Method with Beginning Inventory

Lecture: Focus on the FIFO Inventory Costing Method, Using Standard Costs, and Transferred-In Costs

Lecture: Process Costing Problem

Outcomes

After completing this module, students will beable to

• Identify the situations in which process-costing systems are appropriate
• Describe the five steps in process costing
• Calculate equivalent units and understand how to use them
• Use the first-in, first-out (FIFO) method of process costing
• Incorporate standard costs into process-costing systems
• Apply process-costing methods to situations with transferred-in costs

Lecture: Developing Master Budgets

Lecture: Budgeted Financial Statements, Cash Budgets, and Responsibility Accounting

Lecture: Master Budget Problem

Lecture: Flexible Budgets, Direct Cost Variances, and Management Control

Lecture: Flexible Budget Problem

Outcomes

After completing this module, students will beable to

• Describe the master budget and explain its benefits
• Describe the advantages of budgets
• Prepare the operating budget and its supporting schedules
• Use computer-based financial planning models in sensitivity analysis
• Explain kaizen budgeting and how it is used for cost management
• Describe responsibility centers and responsibility accounting
• Explain how controllability relates to responsibility accounting
• Recognize the human aspects of budgeting
• Distinguish a static budget from a flexible budget
• Develop flexible budgets and compute flexible-budget variances and sales-volume variances
• Explain why standard costs are often used in variance analysis
• Compute price variances and efficiency variances for direct-cost categories
• Understand how managers use variances
• Perform variance analysis in activity-based costing systems
• Describe benchmarking and explain its role in cost management

Lecture: Flexible Budgets, Overhead Cost Variances, and Management Control

Lecture: Overhead Flexible Budget Problem

Outcomes

After completing this module, students will beable to

• Explain the similarities and differences in planning variable overhead costs and fixed overhead costs
• Develop budgeted variable overhead cost rates
• Compute the variable overhead flexible-budget variance, the variable overhead efficiency variance, and the variable overhead spending variance
• Develop budgeted fixed overhead cost rates
• Compute the fixed overhead flexible-budget variance, the fixed overhead spending variance, and the fixed overhead production-volume variance
• Show how the 4-variance analysis approach reconciles the actual overhead incurred with the overhead amounts allocated during the period
• Calculate overhead variances in activity-based costing

Lecture: Inventory Costing and Capacity Analysis

Lecture: Inventory Costing Problem

Lecture: Determining How Costs Behave

Lecture: Linear Cost Estimation Using the High-Low Method Problem

Outcomes

After completing this module, students will beable to

• Identify what distinguishes variable costing from absorption costing
• Compute income under absorption costing and variable costing, and explain the difference in income
• Explain how absorption costing can provide undesirable incentives for managers to build up inventory
• Differentiate throughput costing from variable costing and absorption costing
• Describe the various capacity concepts that can be used in absorption costing
• Examine the key factors in choosing a capacity level to compute the budgeted fixed manufacturing cost rate
• Describe how attempts to recover fixed costs of capacity may lead to price increases and lower demand
• Explain the two assumptions frequently used in cost-behavior estimation
• Describe linear cost functions and three common ways in which they behave
• Understand various methods of cost estimation
• Outline six steps in estimating a cost function using quantitative analysis
• Describe three criteria used to evaluate and choose cost drivers
• Explain and give examples of nonlinear cost functions
• Distinguish the cumulative average-time learning model from the incremental unit-time learning model
• Discuss data problems encountered in estimating cost functions

Lecture: Decision Making and Relevant Information

Lecture: Product Selection with Constrained Resources Problem and Special Order Problem

Outcomes

After completing this module, students will beable to

• Use the five-step decision-making process to make decisions
• Distinguish relevant from irrelevant information in decision situations
• Explain the opportunity-cost concept and why it is used in decision making
• Explain how to choose which products to produce when there are capacity constraints
• Discuss factors managers must consider when adding or dropping customers or segments
• Explain why book value of equipment is irrelevant in equipment-replacement decisions
• Explain how conflicts can arise between the decision model used by a manager and the performance-evaluation model used to evaluate the manager