Managerial Accounting (Advanced): Course 4 of 5

Explore process costing in manufacturing, contrast with job order costing, and calculate cost per unit through production cost reports covering direct materials, conversion costs, and overhead.

Apply process costing in managerial accounting by building production cost reports, calculating finished equivalent units, determining per-unit costs for direct materials and conversion, and recording completed production.

Compare FIFO and weighted average cost flows in process costing, explain combining process and job order costing, and outline merchandising cost flows from purchases to cost of goods sold.

Explore how service businesses determine product costs by tracking direct labor and overhead and applying a predetermined overhead rate to work in process services, leading to cost of services.

Explore standard costs and variance analysis to manage product costs, using materials, labor, and overhead variances and management by exception in Perry shirt manufacturing.

Compute materials price and usage variances and labor rate and efficiency variances from actual and standard costs, and record journal entries including closing entries affecting cost of goods sold.

Calculate material price variance, material quantity variance, labor rate variance, and labor efficiency variance using standard costs and actual input data, and explore responsibility and common causes.

Explore the advantages and disadvantages of standard costs, and how responsibility accounting and decentralization use ROI and residual income to evaluate cost, profit, and investment centers.

Learn how activity based costing (abc) reallocates overhead by activities instead of direct labor, and compare abc with traditional costing to improve cost accuracy and decision making.

Identify overhead cost activities and drive decisions with activity-based costing, measuring drivers and assigning overhead, illustrated by Lilly ice cream’s unit, batch, product line, and facility costs.

Learn how to implement abc overhead costing by analyzing each overhead cost against four activities, then allocate costs to cost pools using time-based percentages in an activity-based cost matrix.

Identify measurable cost drivers in an abc system by linking overhead costs to activities with drivers such as gallons of ice cream produced, while treating facility open costs as common.

Learn to allocate overhead with activity-based costing by using cost pools and drivers: gallons produced, batches, and ingredients—to compute per-flavor overhead and handle common costs.

Explore using abc overhead allocation data to make profitable product decisions, compare traditional and abc profitability, and identify batch, ingredient, and product-line factors for six ice cream flavors.

Explore how activity-based costing improves overhead allocation through five steps—identifying cost activities, cost items, and cost drivers, using cost pools to link overhead to diverse product costs for better decisions.

Explore cvp analysis to project how sales volume affects costs and profits, classify costs as fixed, variable, mixed or step within the relevant range, and assess breakeven and profit scenarios.

Compare the scatter graph and high-low methods to decompose a mixed cost into fixed and variable components, estimating intercept and slope for budgeting.

Apply the least squares method to determine fixed and variable cost components from a scatter of data, using regression to minimize deviations across all points and assess fit with r-squared.

Analyze a contribution margin income statement by separating variable and fixed costs, and compute the contribution margin, variable cost ratio, and contribution margin ratio.

Review the basic cbp equation: sales revenues minus variable costs minus fixed costs equals net income. Apply per-unit and contribution margin concepts to break-even and targeted net income scenarios.

Analyze CVP analysis by calculating Barton inks’ budget and net income for 200,000 units at $36, and compare two profit proposals; illustrate break-even near 6,000 units.

Master capital budgeting for long-term decisions by applying time value of money to four methods: payback period, unadjusted rate of return, net present value, and internal rate of return.

Learn to compute and interpret payback period and unadjusted rate of return for capital budgeting, weigh ease against ignoring time value of money, and apply quick decision rules.

Learn how to calculate net present value by discounting cash inflows and outflows, applying time value of money, and using five-step NPV analysis to invest or reject projects.

Compute the weighted average cost of capital from four financing sources to yield 12.75%, then compare two safety equipment options using 8% present value and select the lower-cost option.

Learn how to compute and interpret the internal rate of return (IRR) and its relation to NPV, using cash inflows and outflows, hurdle rates, and calculator methods.

Discover how to rank capital projects under capital rationing using IRR and profitability index. Learn why NPV isn't suitable for ranking and how profitability index adjusts for initial investment.

Learn how income taxes reshape capital budgeting by affecting after-tax cash flows and depreciation tax shields, and compare straight-line with accelerated depreciation on NPV and IRR outcomes.