Cost Accounting – IE Liquid Pages

Cost
Accounting

By IE University

Chapters

Table of contents

PART 1: INTRODUCTION TO MANAGEMENT AND COST ACCOUNTING
- Chapter 1: The Manager and the Management Accounting
- Chapter 2: An Introduction to Cost Terms and Purposes
PART 2: INVENTORY COSTING AND COST-VOLUME-PROFIT ANALYSIS
- Chapter 3: Cost-Volume-Profit Analysis
- Chapter 9: Inventory Costing and Capacity Analysis
PART 3: PRICING & MEASURING RELEVANT COSTS AND REVENUES FOR DECISION- MAKING
- Chapter 12: Decision Making and Relevant Information
- Chapter 14: Pricing Decisions and Cost Management
PART 4: PRODUCT COSTING: ISSUES AND PROBLEMS
- Chapter 4: Job Costing
PART 5: ACTIVITY-BASED COSTING AND ACTIVITY-BASED MANAGEMENT
- Chapter 5: Activity-Based Costing and Activity-Based Management

Chapter 1: The Manager and the Management Accounting

Chapter 2: An Introduction to Cost Terms and Purposes

Chapter 3: Cost-Volume-Profit Analysis

Chapter 9: Inventory Costing and Capacity Analysis

Chapter 12: Decision Making and Relevant Information

Chapter 14: Pricing Decisions and Cost Management

Chapter 4: Job Costing

Chapter 5: Activity-Based Costing and Activity-Based Management

Key Learning Points*

Distinguish financial accounting from management accounting.
Understand how management accountants help firms make strategic decision.
Describe the set of business functions in the value chain and identify the dimensions of performance that customers are expecting of companies.
Explain the five-step decision-making and process and its roles in management accounting.
Describe three guidelines management accountants follow in supporting managers.
Understand how management accounting fits into and organization’s structure.
Understand what professional ethics means to management accountants.

Go to Chapter

*Retrieved from Datar, S., & Rajan, M. (2021). Horngren’s Cost Accounting a Managerial Emphasis. Pearson, 19.

This access is only available for IE students.

Key Learning Points*

Define and illustrate cost object.
Distinguish between direct cost and indirect cost and indirect cost.
Explain variable costs and fixed costs
Interpret unit cost cautiously.
Distinguish the financial accounting concepts of inventoriable costs and period costs.
Illustrate the flow of inventoriable and period costs in financial accounting.
Explain why product costs are computed in different ways for different purposes.
Describe a framework for cost accounting and cost management.

Go to Chapter

*Retrieved from Datar, S., & Rajan, M. (2021). Horngren’s Cost Accounting a Managerial Emphasis. Pearson, p. 46.

This access is only available for IE students.

Key Learning Points*

Explain the features of cost-volume-profit (CVP) analysis.
Determine the breakeven point and output level needed to achieve a target operating income.
Understand how income taxes affect CVP analysis.
Explain how managers use CVP analysis to make decisions.
Explain how sensitivity analysis helps managers cope with uncertainty.
Use CVP analysis to plan variable and fixed costs.
Apply CVP analysis to a company producing multiple products.
Apply CVP analysis in service and not-for-profit organizations.
Distinguish contribution margin from gross margin.

Go to Chapter

*Retrieved from Datar, S., & Rajan, M. (2021). Horngren’s Cost Accounting a Managerial Emphasis. Pearson, p. 83.

This access is only available for IE students.

Key Learning Points*

Identify what distinguishes variable costing from absorption costing.
Compute operating income under absorption costing and under variable costing and explain the difference in operating income.
Understand how absorption costing can provide undesirable incentives for managers to build up inventory.
Differentiate throughput costing from variable costing and from absorption costing.
Describe the different capacity concepts that can be used in absorption costing.
Examine the key factors managers use to choose a capacity level to compute the budgeted fixed manufacturing cost rate.
Understand issues that play an important role in capacity planning and control.

Go to Chapter

*Retrieved from Datar, S., & Rajan, M. (2021). Horngren’s Cost Accounting a Managerial Emphasis. Pearson, p. 340.

This access is only available for IE students.

Key Learning Points*

Use the five-step decision-making process.
Distinguish relevant from irrelevant information in decision situations.
Explain the concept of opportunity cost and why managers should consider it when making insourcing-versus-outsourcing decisions.
Know how to choose which products to produce when there are capacity constraints.
Explain how to manage bottlenecks.
Discuss the factors managers must consider when adding or dropping customers or business units.
Explain why book value of equipment is irrelevant to managers making equipment-replacement decisions.
Explain how conflict can arise between the decision model a manager uses and the performance-evaluation model top management uses to evaluate managers.

Go to Chapter

*Retrieved from Datar, S., & Rajan, M. (2021). Horngren’s Cost Accounting a Managerial Emphasis. Pearson, p. 484.

This access is only available for IE students.

Key Learning Points*

Discuss the three major factors that affect pricing decisions.
Understand how companies make long-run pricing decisions.
Price products using the target-costing approach.
Apply the concepts of cost incurrence and locked-in costs.
Price products using the cost-plus approach.
Use life-cycle budgeting and costing when making pricing decisions.
Explain the effects of legal restrictions on pricing and the broader notion of price discrimination.

Go to Chapter

*Retrieved from Datar, S., & Rajan, M. (2021). Horngren’s Cost Accounting a Managerial Emphasis. Pearson, p. 580.

This access is only available for IE students.

Key Learning Points*

Describe the building-block concepts of costing systems.
Distinguish job costing from process costing.
Describe the approaches to evaluating and implementing job-costing systems.
Outline the seven-step approach to normal costing.
Distinguish actual costing from normal costing
Track the flow of costs in a job-costing system.
Adjust for under- or overallocated manufacturing overhead costs at the end of the fiscal year using alternative methods.
Understand variations of normal costing.

Go to Chapter

*Retrieved from Datar, S., & Rajan, M. (2021). Horngren’s Cost Accounting a Managerial Emphasis. Pearson, p. 122.

This access is only available for IE students.

Key Learning Points*

Explain how broad averaging undercosts and overcosts products or services
Present three guidelines for refining a costing system
Distinguish between simple and activity-based costing systems
Describe a four-part cost hierarchy
Cost products or services using activity-based costing
Evaluate the benefits and costs of implementing activity-based costing systems
Explain how managers use activity-based costing systems in activity-based management

Go to Chapter

*Retrieved from Datar, S., & Rajan, M. (2021). Horngren’s Cost Accounting a Managerial Emphasis. Pearson, p. 167.

This access is only available for IE students.