Introduction to Managerial Accounting: The Complete Course
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Introduction to Managerial Accounting: The Complete Course

The Complete Managerial Accounting course for BComm and MBA students. Learn about break-even points, budgets, and more!
Best Seller
4.5 (25 ratings)
Instead of using a simple lifetime average, Udemy calculates a course's star rating by considering a number of different factors such as the number of ratings, the age of ratings, and the likelihood of fraudulent ratings.
1,380 students enrolled
Created by Dave Burrell
Last updated 7/2017
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Current price: $10 Original price: $100 Discount: 90% off
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  • 6.5 hours on-demand video
  • Full lifetime access
  • Access on mobile and TV
  • Certificate of Completion
What Will I Learn?
  • Understand Cost Drivers and Cost Driver Activity.
  • Define Fixed and Variable Costs and Create Cost Functions.
  • Use Regression Analysis using the Least Squares Method.
  • Apply Activity Based Costing to Product Costs.
  • Allocate Support Department Costs using the Direct, Step-Down and Reciprocal Method.
  • Use Cost-Volume-Profit Analysis (Break-Even Points)
  • Use Variance Analysis to Determine Labor and Material Variances.
  • Create Cash Budgets.
View Curriculum
  • English
  • Basic Algebra
  • Arithmetic

Managerial Accounting is the study of internal financial information that can influence decision-making. It's the follow up course to Financial Accounting, that can prove to be more difficult for students. We designed the course to act as a perfect supplement for those taking Managerial/Management Accounting in University or College. We'll walk you through the theory, providing examples and questions that will keep you engaged.

The first part of the course will cover:

  • Cost Measurement and Cost Behavior
  • The Design of Cost Functions
  • Fixed Costs, Variable Costs and Mixed Costs
  • Break-Even Analysis
  • Handling Direct and Indirect Costs

The second part will cover:

  • Activity-Based Costing for Overhead Costs
  • Preparing Cash Budgets
  • Variance Analysis
  • Support Departments: Direct, Step-Down and Reciprocal Method
  • And much more!


"I fully attribute me passing the BEC portion of the CPA exam from your videos. Without your easy to learn managerial accounting tutorials, I would never have understood the concepts. I especially thought your videos on variance analysis were exceptional. Thank you so much for everything!"  - Spencer S.

"Hi, I just wanted to say thank you for posting such great videos on YouTube. I believe that they were the reason I just passed my very difficult accounting exam! They were very easy to watch and easy to follow. I appreciate your work!"  - Alana M.

Who is the target audience?
  • University Students
  • College Students
  • CPA Students
  • MBA Students
  • Bookkeepers
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Curriculum For This Course
45 Lectures
Managerial Accounting Introduction
1 Lecture 09:43

In this video we'll introduce you to Managerial/Management Accounting and cover a few different topics that we'll touch on throughout the course.

Preview 09:43
Types of Costs, Cost Drivers and The Relevant Range
4 Lectures 32:36

Cost drivers are key when looking at cost behaviour. There are different cost drivers that can be chosen for different costs; however, there normally is one cost driver than determines cost better than the others--This can be found by analyzing the coefficient of determination.

Join us as we talk about chocolate bars and cost drivers!

Preview 07:01

This quiz should be taken after watching the Cost Drivers video tutorial.

Cost Drivers Quiz
4 questions

In this tutorial we'll distinguish variable costs from fixed costs.  I'll go over the fundamental idea of both types of costs and how they change based on cost driver activity.  We'll graph out some variable and fixed costs to see how they change on a per-unit and total cost basis. 

Fixed and Variable Costs

Fixed and Variable Costs Quiz
4 questions

One of the most common questions I'm asked about is the Relevant Range. The Relevant Range is a range of activity where there is a specific relationship between costs and cost drivers. Join me as I illustrate this bewildering topic in a matter of minutes!

The Relevant Range

Mixed costs contain elements of both fixed and variable costs. Learn about them, how to graph them, examples of mixed costs and more!

Mixed Costs

This quiz should be taken after the Mixed Costs Tutorial.

Mixed Cost Quiz
6 questions
The Cost Function Series
5 Lectures 40:43

Cost functions help us understand cost behavior and how to project costs. We cover the components of a cost function and show the relationship between cost drivers and total cost. Remember that even though a cost function can have a fixed and variable component it can be solely fixed or variable also!  

The Cost Function

The Cost Function Quiz
4 questions

In order to create our cost function we need to calculate the slope. The slope is  known as rise over run or variable cost in our cost function. We go over calculating the slope for a set of data and explain how to use slope to find our missing value, the fixed cost or Y-intercept! 

Slope and The Cost Function

Slope and Cost Function Quiz
5 questions

The high-low activity method provides us with slope using high and low activity points. We go through a quick example and cover the disadvantages to the method, along with some added detail regarding the relevant range. 

The High-Low Activity Method

The High Low Activity Method Quiz
4 questions

The least squares regression method will allow us to construct a cost function using all of the data points. We'll see that the method also yields the coefficient of determination which demonstrates the correlation between our cost and cost driver. Learn more by watching this video!

Regression Analysis: Least Squares Regression Method

Regression Analysis: Least Squares Regression Method Quiz
4 questions

Last time we constructed our cost function using the least squares regression method. In this presentation we'll go over regression output from a graphing calculator. Learn about the coefficient of determination, or the r^2 value and how to interpret it.

Interpreting Regression Output for the Cost Function

Interpreting Regression Output for the Cost Function Quiz
3 questions
Break-Even Points (Cost-Volume Profit Analysis)
10 Lectures 01:20:43

Cost-volume-profit (CVPanalysis is used to evaluate how changes in costs and volume affect a company's operating income and net income.We'll go over the basics of CVP analysis and explain how to use the break even point equation to solve for some general managerial accounting questions!

Break-Even Points and Cost-Volume-Profit Analysis

Break-Even Points and Cost-Volume-Profit Analysis Quiz
4 questions

We've gone over the basic concept of cost-volume-profit analysis in the last tutorial, now we can actually find a break-even point using basic algebra. Understand how to set up and solve for a break-even point along with all of the mechanics. 

Solve Break Even Points Using Algebra

We go over some equations that are brought up within the CVP (cost-volume profit) chapter like how to calculate break even points for units and total dollars. I explain what the contribution margin is and also show how it applies to break even points. 

The Contribution Margin and Break Even Points

The contribution margin and gross margin are very similar. In this tutorial we'll differentiate between both and provide some examples to quickly remember which is which! 

The Contribution Margin vs. The Gross Margin

The margin of safety is the difference between planned sales and our break-even point. Learn how to calculate the margin of safety in this quick tutorial!

What is the Margin of Safety?

A sales mix can affect the way we set up our break-even point equation. What if we're selling 2x the amount of books to magazines? 3x? 4x? In this tutorial, we'll weight the break even equation in a 4:1 ratio and figure out how many books to magazines we'll need to break even. We'll also show you how to confirm that you've calculated the right figure!

Calculate the Break Even Point for a Sales Mix

Both planned profit and tax can affect break-even points. In this tutorial we'll cover how to adjust our break-even equation to solve for the break-even point, when tax and profit is factored in. 

How Profit and Tax Affects Break-Even Points

Financial Leverage can be a tricky topic. We'll try and help you understand it by demonstrating the most common way to leverage an investment or company (through debt) and showing the risks and rewards associated with it. 

What is Financial Leverage or Leveraging

Now we know that leverage magnifies both profits and losses. Let's see how leverage has an impact on a business I used to run as a teenager. Operating leverage will be discussed here and we'll talk about the degree of operating leverage in the next tutorial!

Operating Leverage and Profit

We expand on how leverage affects the operation of a business (from a managerial perspective). Learn what the degree of operating leverage is, along with how to calculate and use it. We'll see how sensitive income is to sales.

The Degree of Operating Leverage
Job-Costing and Direct vs Indirect Costs
7 Lectures 01:05:35

Direct costs are always able to be traced to a cost object. Indirect costs on the other hand cannot be traced and have to be allocated in order to distribute the cost. Join us as we go through some quick examples to understand the difference between direct and indirect costs!

Direct vs Indirect Costs: Example using Portal Guns!

Costs can be split up into manufacturing and non-manufacturing costs. We'll look over certain direct and indirect costs and decide how they should be categorized. This tutorial will come in handy when we begin to prepare Cost of Goods Manufactured Statements!

Manufacturing Costs and Product and Period Costs

Inventory can be classified as three different sub-accounts called raw materials, work in process, and finished goods. Join us as we go through each account and explain how they're used. 

Raw Materials, Work in Process, and Finished Goods Inventory

The Cost of Goods Manufactured Statement categorizes costs as direct materials, direct labor, manufacturing overhead and changes in work in process. Cost of goods manufactured will ultimately be added to finished goods and expensed as cost of goods sold. Join us as we go through the sections of a COGM statement.

Preview 09:43

After going over the Cost of Goods Manufactured Statement we'll learn how to record journal entries for the usage of direct materials, incurring direct labor and overhead costs, along with transferring inventories. Overhead applied and overhead incurred are tricky, so pay attention specifically to that part!

Journal Entries for Job Order Costing

The predetermined overhead rate is used to determine how much overhead is applied to a product or job. In order to determine the rate we'll need to use an allocation base like direct labor hours, direct labor total $'s, or machine hours. How will we know which one to use?? I also explain the difference between actual and normal costing in this tutorial.

Predetermined Overhead Rate and Overhead Applied

Within a normal costing system we'll typically have an over or under-applied amount of overhead. This means that the budgeted overhead is different from the actual. Learn how to adjust for the difference and how to journalize it using the write off or proration method.

Prorating and Writing Off Under/Over Applied Overhead
Activity-Based Costing Systems
1 Lecture 09:46

Activity based costing (ABC) systems provide a way of splitting overhead costs into different overhead activities. The costs are then allocated to products or projects proportionally by their cost driver activity levels. Join us as we go through an example to explain ABC costing.

Activity Based Costing Systems
The Absorption and Contribution Approach
2 Lectures 17:57

This Managerial Accounting tutorial explores the difference between absorption and contribution income statement approaches. 

The Absorption and Contribution Approach for Income Statements

Absorption costs can be separated into two types of costs: inventoriable and non-inventoriable costs. They can also be thought of as manufacturing or non-manufacturing costs. 

Contribution costing separates all costs into either a variable or fixed cost. Watch as we breeze through a comparison of both types of income statements.

Absorption vs Contribution Approach Part 2
Support Costs and Joint Cost Allocation
7 Lectures 01:01:27

Support departments are departments that incur costs (no revenues) and that normally serve revenue producing departments. Examples of such support departments are HR, Accounting, Legal and Security. In the next video we'll look at how to allocate the costs of support departments to revenue departments using the direct, step-down or reciprocal method.

What are Support Departments?

In this tutorial we'll use the direct method to allocate support department (service department) costs to revenue producing departments. The direct method completely ignores that support departments assist other support departments. This is the reason why we don't prorate the cost using any of the cost driver data from support departments. We'll cover the step-down and reciprocal method next. 

Support Cost Allocation Using the Direct Method

In this tutorial we'll use the Step-Down Method to allocate costs from support departments to revenue producing departments. Remember that the ultimate goal is to allocate all support costs to revenue producing departments.

The support department with the highest percentage is allocated first. All of its costs are allocated out — whether to an operating department or to another support department. After that, the support department with the second-highest percentage is allocated. Step by step, the costs for each support department are fully allocated.

Preview 11:05

In this tutorial we discuss allocating support department costs to revenue producing departments using the reciprocal method. The reciprocal method is used when support departments provide services to each other, along with revenue producing departments.

We will use substitution algebra to allocate costs to the revenue producing departments and clear out cost balances in the support departments.

Support Cost Allocation Using the Reciprocal Method

In this tutorial I'll discuss how we can allocate joint costs using the physical units method. We will prorate the joint costs to the separate joint products for the purpose of valuing our inventory and determining income from each product. We need a method that allocates costs so that each product has a fair allocation of cost and yields a profit.

Joint Cost Allocation using the Physical Units Method

Joint Cost Allocation using the Relative Sales Value Method

Joint Costs Allocation using the Net Realizable Value Method
Master Budgets and Cash Budgets
5 Lectures 43:22

The Master Budget begins our chapter on budgets for an organization/company. Don't worry, the name sounds scarier than the actual content. Let us guide you through the explanation of Master Budgets.

Preview 05:21

Cash Flow Statements weren't that tough right? Let's talk about Cash Budgets. Join us as we go through a Cash Budget example which requires us to prepare a sales and collection budget. Get those receipts in!

Preview 08:59

As we slowly construct our Cash Budget, we turn our attention to cash disbursements. Join us as we calculate Cost of Goods Sold and find out how much we're exactly spending on inventory purchases.

The Cash Budget Part 2: Inventory Purchases Budget

We'll be preparing an operating expense budget in this tutorial. Very short video, separating cash and non-cash expenses so that we can move on to the capital purchases and financing section of our cash budget. Enjoy :)

The Cash Budget Part 3: Operating Expenses Budget

The Cash Budget Part 4: Financing Shortfalls and Interest
Variance Analysis
3 Lectures 23:05
Variance Analysis: Master (Static), Flexible and Actual Budgets

Variance Analysis: Calculate Price and Usage Variances

Variance Analysis: Actual Price and Standard Quantities
About the Instructor
Dave Burrell
4.5 Average rating
77 Reviews
3,817 Students
2 Courses
Accounting Instructor, B.Comm, Economics Nerd

I worked on my BComm, majoring in Accounting and Finance at Ryerson University and am currently a CPA student. I've run Notepirate (an accounting and finance website) for 5 years and have worked as an Accounting and Finance educator for 6 years. My videos have been used by countless CPA websites and continuing education websites like TVO's, Independent Learning Center. 

Growing up in Toronto (Canada) I started my Accounting education in high school at North Toronto Collegiate. Like many of you, I struggled to master the fundamentals of Accounting which eventually lead to me being frustrated and confused. I understand this feeling (that you might be having) much too well. 

During the summer I took some time to go back and re-read everything from the beginning. I focused on the fundamentals specifically, because everything you learn in Accounting is derived from them. This provided a strong foundation for me to teach Accounting because of my original confusion with the subject but also my subsequent clarity of the subject. 

When I explain concepts, you're going to see that I not only provide lectures on the subject, but also provide a deep understanding of the material.

Accounting and finance has not only influenced my professional life but also my personal life. Decisions are made on a daily basis. I believe that a strong education in Accounting and Finance equips us with the know how to make sound decisions. 

I look forward to working with you all :)