Cost accounting for dummies / Kenneth W. Boyd.

Format:

Book

Author/Creator:

Boyd, Ken, author.

Series:

--For dummies.

For Dummies

Language:

English

Subjects (All):

Cost accounting.

Physical Description:

1 online resource (451 pages)

Edition:

Second edition.

Place of Publication:

Hoboken, NJ : John Wiley & Sons, Inc., [2022]

Summary:

Take control of overhead, budgeting, and profitability with cost accounting Cost accounting is one of the most important skills in business, and its popularity as a course in undergraduate and graduate business and management programs speaks to its usefulness. But if you've ever felt intimidated by the subject's jargon or concepts, you can stop worrying. Cost accounting is for everyone! In Cost Accounting For Dummies, you'll be taken step-by-step through the basic and advanced topics found in a typical cost accounting class, from how to define costs and how to allocate them to products or services. You'll learn how to determine if a capital expenditure is worth it and how to design a budget model that forecasts changes in costs based on activity levels. Whether you're a student in your first cost accounting course or a professional trying to get a grip on your books, you'll benefit from: Simple methods to evaluate business risks and rewards Explanations of how to manage and control costs during periods of business change and pivots Descriptions of how to use cost accounting to price IT projects Cost Accounting For Dummies is the gold standard in getting a firm grasp on the challenging and rewarding world of cost accounting.

Contents:

Intro

Title Page

Copyright Page

Table of Contents

Introduction

About This Book

Foolish Assumptions

Icons Used in This Book

Beyond the Book

Where to Go from Here

Part 1 Understanding the Fundamentals of Costs

Chapter 1 So You Want to Know about Cost Accounting

Comparing Accounting Methods

Considering your shareholders

Mulling over creditors

Addressing concerns of regulators

Using management accounting

Fitting in cost accounting

Using Cost Accounting to Your Advantage

Starting with cost-benefit analysis

Planning your work: Budgeting

Controlling your costs

Setting a price

Improving going forward

Chapter 2 Brushing Up on Cost Accounting Basics

Understanding the Big Four Terms

Comparing direct and indirect costs

Mulling over fixed and variable costs

Fitting the costs together

Covering Costs in Different Industries

Reviewing manufacturing costs

Considering costs for retailers

Adding up costs for e-commerce firms

Finding costs most companies incur

Why Are You Spending? Cost Drivers

Pushing equipment too hard and relevant range

Previewing inventoriable costs

Following the Rules of the Cost Accounting Road

Understanding generally accepted accounting principles (GAAP)

Deciding on accrual basis or cash basis

Finishing with conservatism

Chapter 3 Using Cost-Volume-Profit Analysis to Plan Your Business Results

Understanding How Cost-Volume-Profit Analysis Works

Calculating the breakeven point

Financial losses: The crash of your cash

Contribution margin: Covering fixed costs

Lowering the breakeven point to reach profitability sooner

Target net income: Setting the profit goal

Using operating leverage

Assessing e-commerce businesses

Timing is everything when it comes to costs.

Using Cost-Volume-Profit Analysis to Make Savvy Business Decisions

Deciding to advertise

Lowering your price without losing your profit

Combining the results of two products

Costing and pricing a new product

The Tax Man Cometh, the Profits Goeth

Understanding pre-tax dollars

Adjusting target net income for income taxes

Chapter 4 Estimating Costs with Job Costing

Understanding How Job Costing Works

Cost objects: The sponges that absorb money

Charging customers for direct and indirect costs

Implementing job costing in manufacturing: An example

Computing direct costs

Calculating indirect costs

Presenting total job costs

Deciding on costing for IT consulting projects

Determining project needs

Plugging in job costing

Taking a Closer Look at Indirect Costs using Normal Costing

Budgeting for indirect costs

Following a normal job costing system

Computing direct costs and indirect costs

Introducing the job cost sheet

Following the Flow of Costs through a Manufacturing System

Control starts with control accounts

Explaining the debit and credit process

Walking through a manufacturing cost example

Applying the methodology to other control accounts

Chapter 5 More Activity, More Cost: Activity-Based Costing

Avoiding the Slippery Peanut Butter Costing Slope

Recognizing a single indirect cost allocation

A fly in the peanut butter: Dealing with different levels of client activity

Missing the mark: Undercosting and overcosting

Designing an Activity-Based Costing System

Refining your approach

Grouping costs using a cost hierarchy

Testing your ABC design

Using Activity-Based Costing to Compute Total Cost, Profit, and Sale Price

Allocating indirect costs evenly by product

Analyzing and reallocating cost activities

Changing allocations to cost pools.

Changing prices after ABC

Implementing ABC Costing for a Business Pivot

Deciding whether to pivot

Mulling over a pivot example

Using ABC Costing for a New Business Model

Considering sunk costs

Reviewing food and labor costs

Allocating new overhead costs

Applying ABC costing to overhead costs

Evaluating your results

Part 2 Planning and Control

Chapter 6 What's the Plan, Stan? Budgeting for a Better Bottom Line

Brushing Up on Budgeting Basics

Seeing the master budget and its component parts

Why budgeting is important

Considering the costs and benefits of data collection

Leveraging AI and data analytics for effective budgeting

Planning strategically

Planning How to Plan: Factors That Impact Your Budgeting Process

Experience counts

Timing is everything

People get you headed in the right direction

Sales projections pay off

The Nuts and Bolts (and Washers) of Budgeting

Understanding the budgeting financials

Reviewing revenue and production budgets

Budgeting with Cash Accounting or Accrual Accounting

Cash basis accounting: Using your checkbook to budget

I accrue, you accrue, we all accrue with accrual accounting

Budgeting to Produce the Income Statement and Balance Sheet

The well-balanced balance sheet

The incredible income statement

Chapter 7 Constant Change: Variance Analysis

Variance Analysis and Budgeting

Using management by exception to recognize large variances

Seeing the problem in using a static budget

Opting for a flexible budget

Investigating budget variances

Analyzing in Material Price and Efficiency Variances

Applying price variances to direct materials

Applying efficiency variances to direct materials

Implementing price variances for direct labor

Sizing up efficiency variances for direct labor.

Using Your Findings to Make Decisions

Following up on variances

Judging the effectiveness of your employees

Tying supply chain concepts to variance analysis

Attaching ABC costing concepts to variance analysis

Chapter 8 Focusing on Overhead Costs

Using Cost Allocation to Minimize Overhead

Paying for the Security Guard: Fixed Overhead Costs

Planning fixed overhead costs

Allocating fixed overhead costs

Assessing potential causes of fixed overhead variances

Those Vexing Variable Manufacturing Costs

Working with variable overhead costs

Implementing variance analysis

Finding the reasons for a variable overhead variance

Chapter 9 What's on the Shelf? Inventory Costing

Working with Inventoriable Costs

Using the matching principle to calculate profit on sale

Erring on the conservative side

Costing Methods for Inventory

Using the first-in, first-out (FIFO) method

Accounting with the last-in, first-out (LIFO) method

Weighing the merits of weighted-average cost

Considering specific identification method

Analyzing profit using FIFO and LIFO

Using Variable and Absorption Costing to Allocate Fixed Manufacturing Costs

Defining period costs and product costs

Applying variable and absorption costing

Relating Capacity Issues to Inventory

Reviewing theoretical and practical capacity

Understanding capacity issues for e-commerce firms

Using normal and master-budget capacity

Choosing a capacity level

Part 3 Making Decisions

Chapter 10 Cost Drivers and Cost Estimation Methods

Working with Cost Behavior

Understanding linear and nonlinear cost functions

Discovering how cost drivers determine total costs

Considering Cost Estimation Methods

Walking through the industrial engineering method

Agreeing on the conference method.

Reviewing the account analysis method

Checking out the quantitative analysis method

Choosing a cost estimation method

Exploring Nonlinear Cost Functions

Changing cost functions and slope co-efficients

Understanding the impact of quantity discounts

Assessing the Impact of Learning Curves

Considering how AI and Data Analytics Impact Learning Curves

Reviewing AI and data analytics

Throwing in the learning curve

Simplifying a procedure

Finding and using better data

Chapter 11 Making Smart Business Decisions with Relevant Information

Navigating the Geography of Relevance

Introducing the decision model

Applying a model to an equipment decision

Understanding IT purchasing issues

Considering relevant qualitative factors in decision-making

Special Orders Don't Upset Us, Do They?

Deciding between Outsourcing and In-house Production

Weighing opportunity costs

Contemplating the carrying cost of inventory

Maximizing Profit When Capacity Is Limited

Managing capacity and product mix

Analyzing customer profit and capacity

Chapter 12 Making Smart Pricing Decisions: Figuring Total Costs

Understanding Influences on Prices

Customers

Competitors

Suppliers

Special orders

Pricing for Profits Down the Road

Reviewing market-based and cost-based pricing

Aiming at the target: Target costing

Arriving at a Reasonable Profit

Using cost-plus pricing

Using product life-cycle budgeting

Managing IT product costs and pricing

Part 4 Allocating Costs and Resources

Chapter 13 Analysis Methods to Improve Profitability

Processing Cost Allocation

Why bother? Purposes of cost allocation

Justifying cost allocation decisions

Implementing Cost Allocation

Using cost hierarchy to allocate costs

Allocating tricky corporate costs.

Keeping track of customer revenues and costs.

Notes:

Includes index.

Description based on print version record.

ISBN:

1-119-85604-3

1-119-85603-5

OCLC:

1291318572