Cost accounting: an introduction to cost management systems

403 Pages·2000·1.48 MB·English

by  Philip Jagolinzer

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Page i
Cost Accounting:
An Introduction to Cost Management Systems
Philip Jagolinzer
University of Southern Maine
Contributing Author
Alan D. Jagolinzer
Page ii
Cost Accounting: An Introduction to Cost Management Systems by
Philip Jagolinzer
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Copyright © 2000 by South-Western College Publishing, a division of
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Library of Congress Cataloging-in-Publication Data
Jagolinzer, Philip.
Cost accounting : an introduction to cost management systems /
Philip Jagolinzer.
p. cm.
Includes index.
ISBN 0-324-01582-8 (softcover : alk. paper)
1. Cost accounting. I. Title.
HF5686.C8J24 2000
657'.42 dc21 99-37191
Page iii
Contents
Preface vii
Chapter 1 1
Introduction: What Is This All About?
How Should Costs Be Shared? 3
Accounting Reports and the Value of Information 5
Inventories and the Cost Accountant 6
Test Yourself 7
Activities 9
Activity 1-1 Just-In-Time Inventory 9
Test Yourself Solutions 10
Chapter 2 12
Cost Accounting and Product Manufacturing
Costs and the Cost Accountant 13
Three Cost Elements 14
Materiality in Categorizing Costs 15
Three Inventories 15
The Job Cost Sheet 16
Product versus Period Costs 17
Prime and Conversion Costs 18
A Closer Look at Factory Overhead and Its Impact on 19
Product Cost
Some Other Matters Affecting Direct Labor 23
Cost Estimation 26
Page iv
Using the Learning Curve to Estimate Labor Costs 27
The Statement of Cost of Goods Manufactured and Sold 28
Adjustment for over-and Underapplied Overhead 33
Applicability to Service Organizations 34
Concluding Thoughts 34
Appendix: Basic General Journal Entries for Job Order 34
Costing
Test Yourself 38
Additional Exercises 41
Cases 45
Case 2-1 The Effect of Transactions on Financial 45
Statements
Case 2-2 Allocation 47
Case 2-3 Allocation/Ethics 48
Case 2-4 Learning Curve 49
Activities 51
Activity 2-1 Allocation Basics 51
Activity 2-2 Internet and CMA Examination 53
Test Yourself Solutions 54
Chapter 3 56
Process Costing Systems
Spoilage 58
Units Accounted For 60
Assigning Costs to Production: Cost Allocation 61
Equivalent Finished Units 62
Beginning Work-in-Process Analysis (March) 62
Started and Completed Production Analysis (March) 63
Ending Work-In-Process Analysis (March) 64
Spoilage Analysis (March) 64
Another Look at the Beginning Work-in-Process 66
A Need to Track Inventory and Spoilage Costs 70
FIFO versus Weighted-Average Approaches 71
Transferred-In Costs 73
Accretion and Shrinkage 80
Changes in Units of Measure 81
Spoilage Recovery 82
Preparing the Process Cost Report 84
Concluding Thoughts 85
Test Yourself 85
Additional Exercises 88
Page v
Activities 91
Activity 3-1 Equivalent Units 91
Test Yourself Solutions 93
Chapter 4 95
Standard Costing Systems
Purpose of Standard Costs 96
Setting Standards 96
Standards and the Flexible Budget 99
Evaluating Performance 101
Materials and Labor Variances 101
Summary: Materials Variances 103
Summary: Labor Variances 104
Introduction to Overhead Variances 105
Variable Overhead Variances 105
Summary: Variable Overhead Variances 107
Fixed Overhead Variances 108
Summary: Fixed Overhead Variances 109
Other Ways to View Overhead Variances 111
Variance Investigation 111
Concluding Thoughts 112
Appendix A: Basic Journal Entries for Standard 114
Costing
Appendix B: Total Overhead Variances 116
Test Yourself 117
Additional Exercises 119
Activities 123
Activity 4-1 Compensating Professional Athletes 123
Test Yourself Solutions 124
Chapter 5 127
Cost Allocation Methods
Direct Overhead 129
The Blanket (or Plantwide) Method 129
The Step Method 130
The Direct Method 137
Activity-Based Costing 142
Joint Products and Their Costs 147
Concluding Thoughts 150