Cost & Management Accounting Basics

Explore labor costing with basic six-hour shifts and overtime premium calculations, including time and a half and double time for Saturday and Sunday, using a practical Alpha Industries example.

Explore allocation, apportionment, and reapportionment of overheads using bases like floor area, value of machinery, and number of employees to assign costs across machining, finishing, and maintenance departments.

Calculate the budgeted overhead absorption rate by dividing budgeted overhead by budgeted activity. Compare actual overhead to absorbed to identify over or under absorption and its effect on the income statement.

Compare absorption costing with activity based costing, identifying cost pools and cost drivers; ABC links overhead to production runs, setups, and material handling for more accurate product costs.

Explore how to build a flexible budget from budgeted money and activity levels, compare it to actual performance, and interpret variances for sales and costs like wages and maintenance.

Learn to prepare a manufacturing account for Ellem Ltd., calculate cost of production with depreciation and overheads, apply 20% transfer pricing, and set unrealized profit provisions.

Learn break-even analysis in cost-volume-profit (CVB) terms, compute fixed and variable costs, determine contribution per unit, break-even point in units and revenue, and assess margin of safety.

Learn to convert markup and margin using cost of sales, selling price, and gross profit relationships; apply cost plus profit equals sales to calculate profits under markup and margin.