Fundamentals of Cost Accounting (Live Online)

Overview

Manufacturers have a multitude of costs that must be included in inventory and cost of goods sold: material, labor, direct variable costs, indirect variable costs and fixed costs. You will learn how to properly identify these costs. Using multiple case studies, this seminar will provide you with detailed information on the various techniques companies have devised to apply all these costs to inventory. Doing so ensures that inventory and cost of goods sold are properly valued for both internal and external users. This seminar provides you with the information you need in deciding how to value inventory and cost of goods sold in your company.

Who Should Attend:

This seminar is designed to help manufacturing managers succeed. If you are responsible for the proper costing of inventory and for assessing manufactured product profitability, this is your seminar.

How you will benefit:

Classify all inventory costs
Create an inventory direct costing system
Identify fixed manufacturing costs
Apply fixed manufacturing costs to inventory
Create a standard costing system and calculate variances
Create an Activity Based Costing (ABC) system
Use cost-volume-profit analysis to determine break-even points and margins of safety
Use relevant costing models for production decisions

What you will cover:

Job costing procedures
Process costing procedures
Absorption costing techniques
Equivalent units of production calculations
Direct costing techniques
Standard costing techniques
ABC costing techniques
Cost-volume-profit analysis
Relevant costing techniques for future production decisions

NOTE: Please bring a calculator to this seminar.

Course Outline:

Learning Objectives

Describe the Fundamental Concepts of Cost Accounting
Apply Cost Accounting Methods to Identify Profitable Products and Services
Analyze Reports to Make Sound Pricing Decisions
Compare Cost Accumulation Systems and Choose the Right One for Your Company
Evaluate Results Against Budgets with Greater Accuracy
Use Cost Accounting Methods to Optimize the Use of People, Resources, and Materials

Introduction to Cost Accounting

Explain the Purpose and Functions of Cost Accounting and Its Relationship to Financial Accounting
Create Cost Estimations By Correctly Applying Relevant Cost-Estimation Strategies
Define and Categorize Inventoriable Costs

Job-Order Costing and Process Costing

Explain the Purpose and Application of Job-Order Costing
Explain the Purpose and Application of Process Costing
Describe and Calculate Equivalent Units
Identify, Define, and Categorize Various Types of Product Costs
Correctly Journalize the Costs of Manufacturing Transactions in a Job-Order Costing System
Correctly Journalize the Costs of Manufacturing Transactions in a Process Costing System
Analyze Overhead Costs and Select the Best Method(s) of Allocating Overhead in a Diverse or Multiproduct Operation
Create Costing Reports, Including a Job-Order Cost Sheet and a Cost of Production Report

Joint Product Costing and Byproduct Costing

Identify Shared Cost Components Across Product Lines
Recognize and Differentiate Between Shared Costs and Separable Costs
Determine Correlating Factors for Cost Allocation During Production
Calculate Net Realizable Value at Various Production Points
Differentiate Between Two Methods of Byproduct Revenue Recognition

Absorption Costing vs. Direct Costing

Differentiate Between Absorption and Direct Costing
Explain Why Absorption Costing Meets GAAP Requirements While Direct Costing Is Useful for Internal Reporting
List the Advantages and Disadvantages of Direct Costing
Recognize the Process and Requirement for Establishing a Direct-Costing System
Convert a Traditional Income Statement into a Direct Costing Income Statement
Reconcile the Differences in Net Income Between the Two Types of Statements By Using the Same Data

Standard Costing and Variance Analysis

Explain the Relationship Between Standard Costs, Employee Motivation, and Performance Evaluations
Understand the Different Approaches to Setting Standards and Explain the Implications of Each Approach
Identify Actions or Situations That Create the Need to Change Standards
Assess the Implications of Changing Standards
Discover the Reasons for Cost Variances and Make Recommendations to Bring Costs into Better Alignment with Established Standards

Activity-Based Costing (ABC) for Management Control

Explain Reasons for Using Activity-Based Costing Instead of Traditional Methods
Identify and Assign Costs to Activities
Design a Basic Activity-Based Costing System
Compare Data Generated By Your Activity-Based Costing System with a Traditional Costing System and Draw Conclusions About the Appropriate Application of Each Method of Costing

Cost-Volume-Profit Analysis and Break-Even Point

Identify Fixed, Variable, and Mixed Costs
Apply Cost Accounting Formulas to Identify Profitability
Explain the Applications and Limitations of Cost-Volume-Profit Analysis
Discuss the Use of Contribution Margin in “What If” Analysis
Describe Margin of Safety and Its Impact on Decisions to Add Fixed Costs or to Change Cost Structures
Create an Income Statement for Use in a Cost-Volume-Profit Analysis That Segregates Costs According to Their Behavior

Relevant Costing and the Contribution Approach to Decision Making

Determine Which Costs Are Considered Relevant in a Decision-Making Process
Apply Relevant Costing to Evaluate Different Scenarios When Making Decisions
Calculate Relevant Costs and Analyze the Implications of Accepting Business at a Special Price
Calculate Relevant Costs and Analyze the Implications of Dropping a Product Line or Closing a Facility
Calculate Relevant Costs and Analyze Potential Decisions When There Are Limiting Factors of Production