EXCEL work: Cost terms
Yummy Carrot Cakes Company is a manufacturing company that makes cakes. Its computer
system produces reports on a monthly basis. Three cost items in the reports are factory rent (in
Table 1), carrot (in Table 2), and milk (in Table
AN INTRODUCTION TO COST TERMS AND PURPOSES
A cost object is anything for which a separate measurement of costs is desired. Examples
include a product, a service, a project, a customer, a brand category, an activity, and a
Ch. 2: An introduction to cost terms and purposes
I. Types of Companies (p. 101)
Manufacturing companies (e.g., FORD, Coca Cola, Kleenex)
Merchandising companies (e.g., BestBuys, Target, Raley)
Service companies (e.g., law firm, accounting firm, bank)
Determining How Costs Behave
Examples of linear functions
(Exhibit 10-1 on p. 342)
Variable Cost (VC)
Fixed Cost (FC)
y = a + bx
y = b + mx
y = bx + a
y = mx + b
y = kx + t
y = ?x + ?
Let us use y = a + bx as the
Master Budgeting and
Job Order Costing (ch. 4)
+ Mat purchased. + TMC* + COGM - COGS
- Mat used
- COGM - COGS GM
I. Types of Companies (p. 101)
Manufacturing companies (make
Merchandising companies (buy goods,
and re-sell them at a higher price).
Service companies (provide a service,
e.g., legal, accounting, educational,
The Manager and
Major differences (Exhibit 1-1 on p. 4)
Focus on internal reports
to help managers make
Past & future orientated.
Do not follow GAAP.
Time span - hourly to
very long term
From Chapter 4: Actual and Normal
Job Costing Methods with ONE line of OH
See pp. 110,107 for JOB 298. It shows the Job Cost Record that has
info. on direct materials, direct labor, and OH (actual OH on p.
Alternative 2 Fixed OH per unit =
Total fixed OH costs / Actual production units
Income Statements (Ch.2,3,4)
- S & A.costs
- Variable costs (VC)
ACC 3140 (02): Cost Accounting
Course Outline for Fall 2014
Dr. Kim Tan
Demergasso-Bava Hall (DBH or P), Room 242
Dept fax: 667-3042
Wednesdays 8:30 am. 12:30 pm., and 3:45 4:
Ch. 10: Determining how costs behave
I. Two assumptions frequently used in cost behavior estimation (p. 342).
a. Variations in the level of a single activity (the cost driver) explain variations in total costs of a cost object.
b. Cost behavior is approxi
Instructions for plotting graphs
1. Set up 2 columns of data in the EXCEL spreadsheet; x (the cost driver) on the left
column and y (the cost) on the right column.
Add commas and dollar signs to the cost data (in the right colu
Ch. 4: Job Costing (Actual Job Costing and Normal Job Costing)
The two most common systems of product costing in manufacturing organizations are job costing and process
costing (pp. 100-101).
Job costing (Ch. 2 & Ch. 4) This costing system is for finding
Chapter 1: The Manager and Management Accounting
I. Major differences between Management and Financial Accounting
See Exhibit 1-1 on p. 4.
II. Strategic decisions (p. 5)
Strategy describes how an organization will compete and the opportunities its manager
Ch. 9: Inventory costing and capacity analysis
Absorption Costing (AC) and Variable Costing (VC) income statements
This income statement has a name. Its called absorption costing
income statement. ALL manufacturing costs (DM, DL, and ALL OH (fi
Ch. 17: Process Costing
Product costing - two most common systems in manufacturing organizations are job-order costing and process
costing (exhibit 4-1 on p. 101, p. 607). In chapter 4, you learnt Actual and Normal Job Costing. In job costing,
Ch. 7: Flexible budgets, direct-cost variances and management control
Variances and Management by Exception
A variance is an absolute difference between actual results and expected/budgeted performance (p. 227). There are
many types of variances (see exhi
Ch. 5 Activity-Based Costing (ABC) and Activity-Based Management
I. Simple Cost System (pp. 141-143)
A Simple Cost system uses a single (or company-wide or plant-wide) indirect/OH rate (pp. 141-143, exhibit 52 on p. 143 shows one row of indirect/OH cost).
Ch. 3: CVP Analysis
You need to use the management accountants income statement (also called variable costing income
statement in chapter 9 and contribution income statement on p. 65) to do CVP.
Example of CVP using the (1) CVP units method and (2) CVP %