Accounting Tools

JANUARY 25, 2025

Since this machine is set up 100 times per year, the first stage allocation is to calculate that each machine setup (an activity) is assigned a $500 charge (calculated as the $50,000 setup cost divided by 100 setups).

Cost Accounting 40

Cost Accounting Accounting Accounting 40

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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 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 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 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

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

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

APRIL 24, 2024

The same approach works in reverse, where the variable component of the cost will be eliminated when the activity level declines below a certain amount.

Cost Accounting 75

Cost Accounting Budgeting Billing 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

MAY 19, 2023

Related Courses Cost Accounting Fundamentals Cost Management Guidebook What is a Deferred Cost? A deferred cost is a cost that you have already incurred, but which will not be charged to expense until a later reporting period. In the meantime, it appears on the balance sheet as an asset.

Cost Accounting 74

Cost Accounting Financial Reporting Accounting Accounting 74

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

APRIL 28, 2023

Related Courses Cost Accounting Fundamentals A period cost is any cost that cannot be capitalized into prepaid expenses , inventory , or fixed assets. A period cost is more closely associated with the passage of time than with a transactional event.

Cost Accounting 75

Cost Accounting Accounting Accounting 75

Accounting Tools

MAY 15, 2023

Related Courses Activity-Based Costing Cost Accounting Fundamentals Cost Management Guidebook What is Cost Structure? Cost structure refers to the types and relative proportions of fixed costs and variable costs that a business incurs.

Customer Service 75

Customer Service Cost Accounting Payroll Billing 75

Accounting Tools

JANUARY 25, 2025

Hodgson's production staff worked 10,000 hours during the month.

Budgeting 40

Budgeting Cost Accounting Accounting Accounting 40

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

JUNE 8, 2023

Related Courses Activity-Based Costing Cost Accounting Fundamentals Financial Analysis What is a Mixed Cost? A mixed cost is a cost that contains both a fixed cost component and a variable cost component. Thus, the cost structure of an entire department can be said to be a mixed cost.

Budgeting 75

Budgeting Financial Analysis Cost Accounting Accounting 75

Accounting Tools

JULY 30, 2023

Related Courses Accounting for Inventory Cost Accounting Fundamentals What is Fixed Overhead? Fixed overhead is a set of costs that do not vary as a result of changes in activity. These costs are needed in order to operate a business.

Cost Accounting 75

Cost Accounting Budgeting Accounting Accounting 75

Accounting Tools

JUNE 19, 2023

Related Courses Cost Accounting Fundamentals Effective Sales Management The Interpretation of Financial Statements What is Sales Mix? How to Calculate Sales Mix A cost accounting variance called sales mix variance is used to measure the difference in unit volumes in the actual sales mix from the planned sales mix.

Budgeting 75

Budgeting Financial Statements Cost Accounting Accounting 75

Accounting Tools

JUNE 7, 2023

Related Courses Activity-Based Costing Cost Accounting Fundamentals What is a Cost Allocation? Cost allocation is the process of identifying, aggregating, and assigning costs to cost objects. A cost object is any activity or item for which you want to separately measure costs.

Cost Accounting 75

Cost Accounting Financial Reporting Tax Accounting 75

Accounting Tools

JULY 17, 2023

Related Courses Accounting for Inventory How to Audit Inventory Inventory Management What is the Cost of Inventory? Inventory cost includes the costs to order and hold inventory , as well as to administer the related paperwork. The cost of cost accounting personnel is charged to expense as incurred.

Cost Accounting 70

Cost Accounting Payroll Auditing Accounting 70

Accounting Tools

JUNE 14, 2023

Related Courses Cost Accounting Fundamentals Cost Management Guidebook What is a Discretionary Fixed Cost? A discretionary fixed cost is an expenditure for a period-specific cost or a fixed asset , which can be eliminated or reduced without having an immediate impact on the reported profitability of a business.

Cost Accounting 75

Cost Accounting Accounting Accounting 75

Accounting Tools

JULY 15, 2023

Related Courses Accounting for Inventory Cost Accounting Fundamentals How to Audit Inventory What is COGS? COGS is the cost of those goods associated with product sales. The main categories of costs included in COGS are direct materials , direct labor , factory overhead , and production supplies.

Payroll 75

Payroll Auditing Cost Accounting Accounting 75

Accounting Tools

NOVEMBER 24, 2023

Related AccountingTools Course Cost Accounting Fundamentals Example of a Controllable Variance ABC Company incurs $92,000 of actual overhead expenses in February. This a particular problem when the baseline standard cost is a "theoretical standard," where the cost can only be attained if everything functions perfectly.

Budgeting 75

Budgeting Cost Accounting Accounting Accounting 75