Introduction, CoGM and Cost Behavior (1).pptx

8/18/2019 Introduction, CoGM and Cost Behavior (1).pptx

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MANAGERIAL AND COST ACCOUNTINGCost and Cost of Goods Manufactured


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Introduction to Managerial and Cost Accounting

• Course introduction

• Obecti!e

• Course outline

• Course "aterial

• Met#odolog$

• Grading


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Definition of Accounting

S$ste"atic

• Recording

• Re%orting• Anal$sis

of financial transactions


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&inancial State"ents

• Director’s Report

• Balance Sheet

• Income Statement

• Statement of Cash Flows

•

Disclosures

• Auditor’s Report

Core Financial

Statements


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Accounting E'uation

Assets ( Liabilities ) E'uit$

Debit

To

Increa

se

Credit To

Increase


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Accounting E'uation

Assets Debit

Liabilities Credit

Equity Credit

Revenue Credit

Expenses Debit


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&inancial Accounting Course

Accounting e'uation

General *ournal

Ledger

Trial +alance Adusting entries

Adusted trial balance

+alance S#eet

Inco"e State"entClosing entries

+an, reconciliation

Accounts recei!able

Notes recei!able

Liabilities- +onds

In!entor$

.ro%ert$/ %lant and e'ui%"ent

- De%reciationIntangible assets


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&inancial !s0 Managerial Accounting

• Financial Accounting – External reporting

• &inancial State"ents to s#o12

• .rofitabilit$

• Li'uidit$

• Sol!enc$• Stabilit$

• Managerial Accounting – Internal Reporting

• Sales &orecasting re%orts

• +udget Anal$sis

• &easibilit$ Studies• Consolidation Re%orts

• Gross Margins re%ort

• In!entor$ 3aluation re%orts


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Cost is a resource sacrificed or forgone to ac#ie!e a s%ecific obecti!e0

A cost is usuall$ "easured as t#e "onetar$ a"ount t#at "ust be %aid to

ac'uire goods or ser!ices0


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Cost according to inventory types

Finished goods inventory Units of %roduct t#at #a!e been co"%leted but not

$et sold to custo"ers0

!or" in process inventory Units of %roduct t#at are onl$ %artiall$ co"%lete0

Ra# $aterials inventory An$ "aterials t#at go into t#e final %roduct0

Costs according to assign$ent to cost ob%ect

Cost ob%ect An$t#ing for 1#ic# cost data are desired0 E4a"%les of cost obects

are %roducts/ custo"ers/ obs/ and %arts of t#e organi5ation suc# as de%art"entsor di!isions0

&' Direct cost A cost t#at can be easil$ and con!enientl$ traced to a s%ecified

cost obect0

(' Indirect cost A cost t#at cannot be easil$ and con!enientl$ traced to a

s%ecified cost obect0

Cost ter"s and classifications


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Cost according to nature

Direct $aterials cost

Materials t#at beco"e an integral %art of a finis#ed %roduct and 1#ose costs can

be con!enientl$ traced to it0

Direct labor cost

&actor$ labor costs t#at can be easil$ traced to indi!idual units of %roduct0 Also

called touc# labor0

Manu)acturing overhead

All "anufacturing costs e4ce%t direct "aterials and direct labor0

Indirect labor

T#e labor costs of anitors/ su%er!isors/ "aterials #andlers/ and ot#er factor$

1or,ers t#at cannot be con!enientl$ traced to %articular %roducts0

Indirect $aterials

S"all ite"s of "aterial suc# as glue and nails t#at "a$ be an integral %art of afinis#ed %roduct/ but 1#ose costs cannot be easil$ or con!enientl$ traced to it0



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Costs according to cost behavior pattern

Cost behavior

T#e 1a$ in 1#ic# a cost reacts to c#anges in t#e le!el of acti!it$0

&' *ariable cost

A cost t#at !aries/ in total/ in direct %ro%ortion to c#anges in t#e le!el of acti!it$0 A !ariable cost is constant %er unit0

(' Fixed cost

A cost t#at re"ains constant/ in total/ regardless of c#anges in t#e le!el of

acti!it$ 1it#in t#e rele!ant range0 If a fi4ed cost is e4%ressed on a %er unit basis/

it !aries in!ersel$ 1it# t#e le!el of acti!it$0

Costs in $anu)acturing setup

+ri$e cost Direct "aterials cost %lus direct labor cost0

Conversion cost Direct labor cost %lus "anufacturing o!er#ead cost0



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,olution


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,olution


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COST +E6A3IOR


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Introduction, CoGM and Cost Behavior (1).pptx

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