Accounting Tools

OCTOBER 19, 2024

Presentation of Variable Overhead Variable overhead is typically aggregated into the cost of goods sold, and so is not shown separately in the income statement. Variable Overhead Variances Variable overhead is analyzed with two variances, which are noted below.

Budgeting 75

Budgeting Financial Statements Cost Accounting Billing 75

Accounting Tools

JUNE 2, 2024

Under this payment method, wages are only paid on a per-unit-produced basis, and so can definitely be classified as a variable cost. One exception to this rule is piece rate wages , which do change with production volumes.

Financial Analysis 40

Financial Analysis Cost Accounting Payroll Tax 40

Accounting Tools

SEPTEMBER 24, 2023

What is an Accounting Department? The accounting department is part of the corporate overhead group of an organization. It is responsible for billings, payroll , cost accounting , the production of financial statements , paying suppliers , and similar activities.

Financial Analysis 40

Financial Analysis Accounting Accounting Financial Statements 40

Accounting Tools

MARCH 11, 2024

What is an Accounting System? An accounting system is a set of accounting processes with integrated procedures and controls. Though an accounting system can be entirely paper-based, this situation is usually only found in quite small businesses.

Accounting 40

Accounting Accounting Accounting Software Billing 40

Accounting Tools

MARCH 28, 2023

Related Courses Accounting for Inventory Bookkeeping Guidebook Cost Accounting Fundamentals What is Accounting Cost? Accounting cost is the recorded cost of an activity. An accounting cost is recorded in the ledgers of a business, so the cost appears in an entity's financial statements.

Accounting 40

Accounting Accounting Financial Statements Cost Accounting 40

Accounting Tools

APRIL 7, 2024

Related AccountingTools Courses Accounting for Inventory Activity-Based Costing Cost Accounting Fundamentals What is Not Included in Manufacturing Overhead? Manufacturing overhead does not include any of the selling or administrative functions of a business. it is also possible to use multiple allocation methods.

Cost Accounting 75

Cost Accounting Financial Statements Financial Reporting Auditing 75

Accounting Tools

AUGUST 11, 2024

The classic example of a process costing environment is a petroleum refinery, where it is impossible to track the cost of a specific unit of oil as it moves through the refinery. Direct Materials Costs Using either a periodic or perpetual inventory system, we determine the amount of direct materials used during the period.

Collections 75

Collections Cost Accounting Accounting Accounting 75

Accounting Tools

JUNE 20, 2024

Managers may also prefer to focus on the impact of a product on a bottleneck operation, which means that their main focus is on the direct materials cost of a product and the time it spends in the bottleneck operation. It is charged to the cost of goods sold as soon as the product is sold, and appears as an expense on the income statement.

Cost Accounting 75

Cost Accounting Financial Statements Financial Reporting Payroll 75

Accounting Tools

OCTOBER 27, 2023

Related Courses Bookkeeping Guidebook New Controller Guidebook What is Account Analysis? Account analysis involves an examination of the detailed line items comprising an account. Without proper account analysis, these accounts tend to build up amounts that should have been purged at some point in the past.

Accounting 40

Accounting Accounting Reconciling Account Reconciliation 40

Accounting Tools

OCTOBER 23, 2023

Related Courses Bookkeeping Guidebook Cost Accounting Fundamentals The difference between cost and expense is that cost identifies an expenditure , while expense refers to the consumption of the item acquired. Unfortunately, cost and expense tend to be used interchangeably even within the accounting terminology.

Cost Accounting 75

Cost Accounting Billing Bookkeeping Financial Accounting 75

Accounting Tools

JULY 27, 2023

Related Courses Activity-Based Costing Activity-Based Management Cost Accounting Fundamentals What is Costing? Costing is any system for assigning costs to an element of a business. This calls for the use of a cost allocation system, consistently applied.

Cost Accounting 75

Cost Accounting Tax Accounting Accounting 75

Accounting Tools

AUGUST 7, 2024

For example, if the amount in the manufacturing overhead cost pool is $10,000 and there are a total of 1,000 hours of machine time used by all products, then the burden rate is $10.00 This information is of less use for internal decision-making purposes, where managers typically use direct costs instead. per machine hour used.

Payroll 76

Payroll Cost Accounting Financial Reporting Billing 76

Accounting Tools

JUNE 12, 2023

Related Courses Cost Accounting Fundamentals Financial Analysis Operations Management How to Calculate Efficiency The efficiency equation is a comparison of the work output from an operation to the work input to that same operation. The concept has been most thoroughly formalized in cost accounting , as noted below.

Financial Analysis 75

Financial Analysis Cost Accounting Accounting Accounting 75

Accounting Tools

APRIL 25, 2024

Related AccountingTools Courses Activity-Based Costing Cost Accounting Fundamentals Example of a Downward Demand Spiral Tsunami Products manufactures several types of shower heads. After a detailed analysis of margins, the company’s cost accountant recommends to management that the dual shower head model be cancelled.

Cost Accounting 75

Cost Accounting Accounting Accounting 75

Accounting Tools

NOVEMBER 1, 2023

Related Courses Accounting for Inventory Cost Accounting Fundamentals What is Factory Cost? Factory cost refers to the total cost required to manufacture goods. This concept is the basis for several cost accounting analyses. As such, these costs are recorded as part of the inventory asset.

Cost Accounting 75

Cost Accounting Accounting Accounting 75

Accounting Tools

JULY 11, 2024

Related AccountingTools Courses Accounting for Inventory Cost Accounting Fundamentals How to Audit Inventory Direct Materials Use in Throughput Analysis Direct materials is an important concept in throughput analysis , where throughput is the revenue generated by a product sale, less all totally variable costs.

Billing 73

Billing Cost Accounting Auditing Accounting 73

Accounting Tools

JULY 13, 2023

Related Courses Accounting for Inventory Cost Accounting Fundamentals What is Full Costing? Full costing is used to determine the complete and entire cost of something. The concept is most commonly used for recording the full cost of inventory in the financial statements.

Financial Reporting 40

Financial Reporting Cost Accounting Financial Statements Collections 40

Accounting Tools

JUNE 9, 2023

Related Courses Accounting for Inventory Cost Accounting Fundamentals What is Job Costing? Job costing involves the accumulation of the costs of materials, labor, and overhead for a specific job. An alternative use is to see if any excess costs incurred can be billed to a customer.

Cost Accounting 40

Cost Accounting Billing Invoicing Budgeting 40

Accounting Tools

JULY 12, 2024

The cost of labor may be subdivided into the cost of labor related to the production of goods (known as the cost of direct labor ) and the cost of labor related to all other activities (known as the cost of indirect labor ). Allocated from total w/c cost Medical insurance 100.00 of wages Medicare tax 14.50

Invoicing 75

Invoicing Cost Accounting Payroll Tax 75

Accounting Tools

JULY 19, 2023

Related Courses Cost Accounting Fundamentals What is a Material Variance? Material variance has two definitions, one relating to direct materials and the other to the size of a variance. They are noted below.

Financial Statements 40

Financial Statements Cost Accounting Accounting Accounting 40

Accounting Tools

MAY 21, 2023

Related Courses Activity-Based Costing Cost Accounting Fundamentals What is a Standard Labor Rate? There are two definitions of the standard labor rate concept, which are noted below.

Cost Accounting 40

Cost Accounting Payroll Billing Tax 40

Accounting Tools

JUNE 21, 2023

Related Courses Accounting for Inventory Cost Accounting Fundamentals What are Conversion Costs? Conversion costs are those production costs required to convert raw materials into completed products. Therefore, the conversion cost per unit for the month was $6.80

Cost Accounting 75

Cost Accounting Payroll Tax Accounting 75

Accounting Tools

APRIL 10, 2023

Related Courses Accounting for Inventory Cost Accounting Fundamentals What is a Hybrid Costing System? A hybrid costing system is a cost accounting system that includes features of both a job costing and process costing system.

Cost Accounting 75

Cost Accounting Accounting Accounting 75

Accounting Tools

MAY 12, 2024

Related AccountingTools Courses Cost Accounting Fundamentals Financial Analysis Related Articles Allowable Costs Committed Cost Direct Cost Incremental Cost Unavoidable Cost Training can usually be curtailed for extended periods of time, though doing so can reduce the level of employee expertise.

Financial Analysis 75

Financial Analysis Cost Accounting Tax Accounting 75

Accounting Tools

JULY 7, 2024

This situation can arise when the cost accountant does not want to track very many cost drivers , preferring instead to use a more simplified system. The use of a weighted cost driver can be very cost-effective, since less data collection work is required.

Cost Accounting 40

Cost Accounting Collections Accounting Accounting 40

Accounting Tools

FEBRUARY 11, 2024

When to Use Normal Costing Normal costing is designed to yield product costs that do not contain the sudden cost spikes that can occur when actual overhead costs are used; instead, it uses a smoother long-term estimated overhead rate.

Financial Reporting 74

Financial Reporting Cost Accounting Budgeting Accounting 74

Accounting Tools

JUNE 11, 2023

Related Courses Accountants' Guidebook Bookkeeping Guidebook Cost Accounting Fundamentals What is the Cost of Sales? The cost of sales is the accumulated total of all costs used to create a product or service, which has been sold.

Cost Accounting 75

Cost Accounting Accounts Payable Accounts Payable Bookkeeping 75

Accounting Tools

OCTOBER 7, 2023

Related Courses Accountants’ Guidebook Bookkeeping Guidebook Cost Accounting Fundamentals What is a Deferred Expense? A deferred expense is a cost that has already been incurred, but which has not yet been consumed. It defers this cost at the point of payment (in April) in the prepaid rent asset account.

Financial Statements 75

Financial Statements Cost Accounting Financial Reporting Accounting Software 75

Accounting Tools

JULY 25, 2024

This means that costs incurred within a reporting period are assumed to be directly associated with it, and so must be recognized in the period incurred. Thus, administrative overhead is not capitalized into the cost of inventory, and so does not carry forward into future periods as an asset.

Cost Accounting 40

Cost Accounting Auditing Accounting Accounting 40

Accounting Tools

APRIL 20, 2023

Related Courses Cost Accounting Fundamentals What is Full Cost? Full cost is the aggregation of all costs associated with a product or other cost object. These costs include both the direct costs and indirect costs of production, but do not include selling, general and administrative expenses.

Cost Accounting 75

Cost Accounting Accounting Accounting 75

Accounting Tools

JULY 14, 2024

However, commission expenses are sometimes categorized lower down, in the selling and administrative expenses section of the income statement.

Payroll 52

Payroll Cost Accounting Tax Accounting 52

Accounting Tools

OCTOBER 22, 2023

Related Courses Cost Accounting Fundamentals What is Variable Cost? A variable cost is a cost that varies in relation to either production volume or the amount of services provided. If no production or services are provided, then there should be no variable costs.

Cost Accounting 75

Cost Accounting Accounting Accounting 75

Accounting Tools

OCTOBER 23, 2023

Related Courses Cost Accounting Fundamentals What is the Relative Sales Value Method? The relative sales value method is a technique used to allocate joint costs based on the prices at which products will be sold.

Cost Accounting 75

Cost Accounting Accounting Accounting 75

Accounting Tools

JULY 28, 2023

Related Courses Accounting for Inventory Activity-Based Costing Cost Accounting Fundamentals What is a Plantwide Overhead Rate? The plantwide overhead rate is a single overhead rate that a company uses to allocate all of its manufacturing overhead costs to products or cost objects.

Financial Statements 75

Financial Statements Cost Accounting Accounting Accounting 75

Accounting Tools

DECEMBER 26, 2023

If the overhead rate is not included in the cost of a product, then there is a risk that the company will significantly underprice its products or services, and eventually go bankrupt. The result is fully-loaded inventory costs that it reports on its balance sheet.

Budgeting 75

Budgeting Cost Accounting Financial Reporting Accounting 75

Accounting Tools

OCTOBER 18, 2024

If a cost is capitalized, it is charged to expense over time through the use of amortization (for intangible assets ) or depreciation (for tangible assets ). A short-term variation on the capitalization concept is to record an expenditure in the prepaid expenses account, which converts the expenditure into an asset.

Auditing 74

Auditing Accounting Accounting Tax 74

Accounting Tools

OCTOBER 23, 2023

Related Courses Business Insurance Fundamentals Fair Value Accounting Mergers and Acquisitions What is Replacement Cost? Replacement cost is the price that an entity would pay to replace an existing asset at current market prices with a similar asset. Related Articles Accounting Cost Actual Cost Explicit Cost Relevant Cost

Budgeting 40

Budgeting Accounting Accounting Cost Accounting 40