ACCT
ACCT102 Wk1a CostConcepts

ACCT102 Wk1a CostConcepts - ACCT102 Management Accounting...

Info icon This preview shows pages 1–13. Sign up to view the full content.

ACCT102 Management Accounting Aug 2013 1 Week 1 Cost Concepts Cost and Cost Classifications
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

Costs in an organization 2 OBJECTIVES Where do we want to go? Physical Resources $$$ Human Resources $$$ Support services Accounting Human resources Legal services Information systems Telecommunications R & D Design Supply Product-ion Marketing Distribut- ion Customer service Value of products and services Value Chain S T R A T E G Y H o w d o w e w a n t t o g e t t h e r e ?
Image of page 2
Product Costs for Financial Reporting & Decision-Making E.g. How would you calculate the cost of the product? Aug 2013 3 Focus of Product Costing (applies FA concepts)
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

Company producing Multiple Products Aug 2013 4
Image of page 4
Cost Concepts Aug 2013 5 All Costs Incurred Manufacturing Costs Non-Manufacturing Costs Direct Indirect Supporting Others Product A Product B Financial Statements Function of Cost? Traceable to Cost Object? Cost Object Allocate Trace
Image of page 5

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

Manufacturing or Non-Manufacturing Cost? 6 Is Cost required for manufacturing ? Manufacturing Cost (Product Cost or Inventoriable Cost) Examples Lubricant for production machinery Packing materials of raw materials Salary of production workers Depreciation of factory Non-Manufacturing Cost (Period Cost or Expense) Examples Lubricant for office equipment Packing materials for delivery to customers Salary of salesmen Depreciation of shop YES; result in a Product -> Asset NO; cannot be captured in an asset -> Expense Aug 2013
Image of page 6
Manufacturing Costs 7 Direct materials 1 sqm @ $10/sqm Direct labour 0.5 hour @ $50/hr Indirect manufacturing costs (aka Manufacturing Overhead) $10,000 per month for whole factory Aug 2013
Image of page 7

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

Direct Cost $ Cost Object Can the cost be conveniently traced to the cost object? How significant ($) is the cost? Examples: Cost of fabric ( direct material ); Cost of production worker ( direct labour ) Manufacturing Costs: Direct Costs of 8 Aug 2013
Image of page 8
Manu Overheads are Common Costs $ e.g. factory rental; depreciation of sewing machines Cost Object Manufacturing Costs: Indirect Costs 9 S H A R E D c o s t ; N o t t r a c e a b l e Aug 2013
Image of page 9

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

Manufacturing Costs 10 Manufacturing Costs Direct Materials Direct Labour Manu Overhead/Indirect Manufacturing Cost Indirect materials Indirect labour Other indirect costs needed for manufacturing e.g. depreciation of prodn eqpt; utilities of factory; insurance on production facilities Aug 2013
Image of page 10
Homework: Garrison 2-23 Direct & Indirect cost 11 Madison Seniors Care Centre Program A Progam B: Meals on Wheel Other Programs Other Programs August 2012
Image of page 11

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

Homework: Garrison 2-23 Direct & Indirect cost 12 Program A Meals on Wheel Program Other Programs Other Programs Direct or Indirect: always with respect to the cost object .
Image of page 12
Image of page 13
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern