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30-Day Money-Back Guarantee

This course includes:

  • 6.5 hours on-demand video
  • 32 downloadable resources
  • Full lifetime access
  • Access on mobile and TV
Teaching & Academics Other Teaching & Academics Management Accounting

Relevant Costs - Managerial Accounting Decisions & Scenarios

Common managerial accounting decisions analyzed using relevant cost methods that can apply to all large decisions
Rating: 4.2 out of 54.2 (108 ratings)
26,311 students
Created by Robert (Bob) Steele
Last updated 5/2019
English
English [Auto]
30-Day Money-Back Guarantee

What you'll learn

  • Managerial accounting concepts
  • How to use relevant costs to make decisions
  • How to apply relevant costs to make a "make or buy" decision
  • How to apply relevant costs to make a "sales mix" decision
  • How to apply relevant costs to make a decision to eliminate a division or not
  • How to apply relevant costs to make a to purchase new equipment or not
  • How to apply relevant costs to make a to accept a special offer or not
  • How to set a unit sales price using cost data

Requirements

  • Understanding of basic accounting terms

Description

Apply relevant cost methods to common managerial decisions.

Managers often need to make decisions that are not routine, not part of the normal day to day process, and that can have a long-term effect on the organization. Individuals often need to make similar decisions and can apply similar tools when making decisions of a large dollar amount that can affect multiple years.

Although the specifics of each decision differ, the concept of relevant costs helps us put together a process for gathering and analyzing data, picking up the information that matters, and removing all the excess data that does not matter to our decision. Understanding relevant costs will reduce the likelihood of making incorrect decisions based on a sunk cost effect or not taking into account opportunity costs.

We will analyze the decision-making process of buying a new piece of equipment or keeping an older piece of equipment, a question often relevant to individuals as well as businesses. The decision of whether to buy new equipment is subject to the sunk fallacy effect, and we will discuss why this is.

This course will investigate the managerial accounting question of a “special offer.” The “special offer” question often takes the form of a one time offer to purchase from us at a reduced price. It is often the case that a business will benefit from accepting a special offer and the concept of relevant costs will help us to see why. For example, a hotel may have an incentive to take a “special offer” to sleep in a room for a night at a price far below the standard rate and even below cost as it is generally calculated. We will discuss why, and how this concept applies to business in general.

We will apply the concepts of relevant costs to a “make or buy” type decision. Should we make a component internally or purchases it from an outside vendor?

The course will discuss the managerial accounting question of whether we should process a product further. In other words, should we sell a product at one point of production or should we process the product further and sell it for a higher price? We will also discuss a similar question related to defective inventory and whether we should scrap the inventory now or rework it.

We will discuss the question of what sales mix to use. In other words, if we have multiple products which ones should we produce and how much should we produce?

The course will discuss the question of eliminating a segment or department of a company. For example, if a departmental income statement shows a loss, should the department be eliminated and how can we apply relevant costs to make the best decision?

We will discuss how to use cost data to set a sales price using a cost method and variable cost method.

Who this course is for:

  • Accounting students
  • Business owners & professionals
  • Anyone who whats to learn accounting

Course content

9 sections • 92 lectures • 6h 28m total length

  • Preview07:06
  • Preview00:08
  • Preview13:09
  • Multiple Choice Question 1
    05:48
  • Accounting Comic Break
    00:20

  • 2 Managerial Accounting Overview
    00:23
  • PDF - 10 Managerial Accounting Introduction
    00:08
  • 10 Managerial Accounting Introduction
    13:03
  • PDF - 20 Cost Classifications
    00:08
  • 20 Cost Classifications
    09:31
  • PDF - 30 Product Costs & Period Costs
    00:08
  • 30 Product Costs & Period Costs
    16:25
  • PDF - 40 Prime Costs & Conversion Costs
    00:08
  • 40 Prime Costs & Conversion Costs
    05:35
  • PDF - 50 Manufacturer's Balance Sheet
    00:08
  • 50 Manufacturer's Balance Sheet
    03:15
  • PDF - 60 Manufacturer's Income Statement
    00:08
  • 60 Manufacturer's Income Statement
    08:49
  • PDF - 70 Manufacturing Activities Flow
    00:08
  • 70 Manufacturing Activities Flow
    07:51
  • PDF - 80 Just In Time (JIT) Manufacturing
    00:08
  • 80 Just In Time (JIT) Manufacturing
    02:58

  • 3 Make or Buy Decision
    01:06
  • PDF - 252 Make or Buy Decision
    00:08
  • 252 Make or Buy Decision
    05:12
  • Excel Worksheet Download
    00:05
  • Worksheet - 252 Make or Buy
    07:36
  • Multiple Choice Question 2
    05:45
  • Accounting Comic Break
    00:19

  • 4 Scrap or Rework & Sell or Process Further Decisions
    01:39
  • PDF - 262 Scrap or Rework
    00:08
  • 262 Scrap or Rework
    05:15
  • Excel Worksheet Download
    00:05
  • Worksheet - 262 Scrap or Rework
    05:07
  • Excel Worksheet Download
    00:05
  • Worksheet - 264 Scrap or Rework
    03:10
  • PDF - 272 Sell or Process Further
    00:08
  • 272 Sell or Process Further
    04:08
  • Excel Worksheet Download
    00:05
  • Worksheet - 272 Sell or Process Further
    04:24
  • Multiple Choice Question 3
    05:57
  • Accounting Comic Break
    00:21

  • 5 Sales Mix Decision
    01:13
  • PDF - 280 Product Mix Decision
    00:08
  • 280 Product Mix Decision
    14:44
  • Excel Worksheet Download
    00:05
  • Worksheet - 282 Sales Mix
    17:37
  • Excel Worksheet Download
    00:05
  • Worksheet - 284 Sales Mix
    07:33
  • Multiple Choice Question 4
    07:07
  • Accounting Comic Break
    00:20
  • Accounting Comic Break
    00:21

  • 6 Segment Elimination or Not Decision
    01:10
  • PDF - 300 Department Operating at a loss Close or Not
    00:08
  • 300 Department Operating at a loss Close or Not
    06:32
  • Excel Worksheet Download
    00:05
  • Worksheet - 302 Segment Elimination
    22:56
  • Multiple Choice Question 5
    08:18
  • Accounting Comic Break
    00:20

  • 7 Equipment Keep Old or Buy New Decision
    01:23
  • PDF - 410 Equipment Keep Old or Purchase New
    00:08
  • 410 Equipment Keep Old or Purchase New
    07:38
  • Excel Worksheet Download
    00:05
  • Worksheet - 410 Keep Old Equipment or Purchase New
    06:31
  • Multiple Choice Question 6
    11:10
  • Accounting Comic Break
    00:13

  • 8 Special Offer – Accept or Deny Decision
    01:50
  • PDF - 450 Special Project or Offer - Accept or Reject Decision
    00:08
  • 450 Special Project or Offer - Accept or Reject Decision
    13:30
  • Excel Worksheet Download
    00:05
  • Worksheet - 452 Special Offer
    19:48
  • Excel Worksheet Download
    00:05
  • Worksheet - 454 Special Offer
    15:37
  • Excel Worksheet Download
    00:05
  • Worksheet - 455 Special Offer
    07:27
  • Excel Worksheet Download
    00:05
  • Worksheet - 472 Service Selling Price
    02:30
  • Multiple Choice Question 7
    11:20
  • Multiple Choice Question 8
    04:48
  • Accounting Comic Break
    00:13

  • 9 Set Sales Price Using Cost Data
    00:33
  • PDF - 432 Set Sales Price
    00:08
  • 432 Set Sales Price
    08:34
  • Excel Worksheet Download
    00:05
  • Worksheet - 432 Sales Price Total Cost Method
    07:17
  • Excel Worksheet Download
    00:05
  • Worksheet - 433 Sales Price Variable Cost Method
    11:33
  • Excel Worksheet Download
    00:05
  • Worksheet - 436 Target Costing Using Excel Feature Goal Seek
    04:37
  • Multiple Choice Question 9
    10:54
  • Multiple Choice Question 10
    05:19
  • Accounting Comic Break
    00:13

Instructor

Robert (Bob) Steele
CPA, CGMA, M.S. Tax, CPI
Robert (Bob) Steele
  • 4.4 Instructor Rating
  • 14,745 Reviews
  • 306,233 Students
  • 91 Courses

Through working with students from many different schools, Mr. Steele has learned best practices for helping people understand accounting fast. Learning new skills and finding the best way to share knowledge with people who can benefit from it is a passion of his.  

Mr. Steele has experience working as a practicing Certified Public Accountant (CPA), an accounting and business instructor, and curriculum developer. He has enjoyed putting together quality tools to improve learning and has been teaching, making instructional resources, and building curriculum since 2009. He has been a practicing CPA since 2005. Mr. Steele is a practicing CPA, has a Certified Post-Secondary Instructor (CPI) credential, a Master of Science in taxation from Golden Gate University, a Bachelor’s Degree in Business Economics with an emphasis in accounting from The University of California Santa Barbara, and a Global Management Accounting Designation (CGMA) from The American Institute of CPA (AICPA).  

Mr. Steele has also authored five books that can be found on Amazon or in audiobook format on Audible. He has developed bestselling courses in accounting topics including financial accounting and QuickBooks accounting software.  

In addition to working as an accountant, teaching, and developing courses Mr. Steele has helped create an accounting website at accountinginstruction, a YouTube channel called Accounting Instruction, Help, and How Too, and has developed supplemental resources including a Facebook Page, Twitter Page, and Podcasts that can be found on I-tunes, Stitcher, or Soundcloud. Mr. Steele's teaching philosophy is to make content applicable, understandable, and accessible.  

Adult learners are looking for application when they learn new skills. In other words, learners want to be able to apply skills in the real world to help their lives. Mr. Steele’s formal accounting education, practical work experience, and substantial teaching experience allow him to create a curriculum that combines traditional accounting education with practical knowledge and application. He accomplishes the goals of making accounting useful and applicable by combining theory with real-world software like Excel and QuickBooks.  

Many courses teach QuickBooks data entry or Excel functions but are not providing the real value learners want. Real value is a result of learning technical skills like applications, in conjunction with specific goals, like accounting goals, including being able to interpret the performance of a business.  

Mr. Steele makes knowledge understandable by breaking down complex concepts into smaller units with specific objectives and using step by step learning processes to understand each unit. Many accounting textbooks cram way too much information into a course, making it impossible to understand any unit fully. By breaking the content down into digestible chunks, we can move forward much faster.  

Mr. Steele also makes use of color association in both presentations and Excel worksheets, a learning tool often overlooked in the accounting field, but one that can vastly improve the speed and comprehension of learning accounting concepts.  

The material is also made understandable through the application of concepts learned. Courses will typically demonstrate the accounting concepts and then provide an Excel worksheet or practice problems to work through the concepts covered. The practice problems will be accompanied by an instructional video to work through the problem in step by step format. Excel worksheets will be preformatted, usually including an answer tab that shows the completed problem, and a practice tab where learners can complete the problem along with a step by step presentation video.  

Mr. Steele makes learning accounting accessible by making use of technology and partnering with teaching platforms that have a vision of spreading knowledge like Udemy.

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