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
- 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
- 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
- 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
- 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
- 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
- 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
- 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