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Cost Accounting For Dummies, 2nd Edition

Name: Cost Accounting For Dummies, 2nd Edition
Author: Kenneth W. Boyd
ISBN: 9781119856023

by Kenneth W. Boyd

February 2022

Intermediate to advanced

448 pages

10h 57m

English

For Dummies

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Cover
Title Page
Copyright
Introduction
About This BookFoolish AssumptionsIcons Used in This BookBeyond the BookWhere to Go from Here
Part 1: Understanding the Fundamentals of Costs
Chapter 1: So You Want to Know about Cost Accounting
Comparing Accounting MethodsUsing Cost Accounting to Your Advantage
Chapter 2: Brushing Up on Cost Accounting Basics
Understanding the Big Four TermsCovering Costs in Different IndustriesWhy Are You Spending? Cost DriversFollowing the Rules of the Cost Accounting Road
Chapter 3: Using Cost-Volume-Profit Analysis to Plan Your Business Results
Understanding How Cost-Volume-Profit Analysis WorksUsing Cost-Volume-Profit Analysis to Make Savvy Business DecisionsThe Tax Man Cometh, the Profits Goeth
Chapter 4: Estimating Costs with Job Costing
Understanding How Job Costing WorksTaking a Closer Look at Indirect Costs using Normal CostingFollowing the Flow of Costs through a Manufacturing System
Chapter 5: More Activity, More Cost: Activity-Based Costing
Avoiding the Slippery Peanut Butter Costing SlopeDesigning an Activity-Based Costing SystemUsing Activity-Based Costing to Compute Total Cost, Profit, and Sale PriceImplementing ABC Costing for a Business PivotUsing ABC Costing for a New Business Model
Part 2: Planning and Control

Chapter 6: What’s the Plan, Stan? Budgeting for a Better Bottom Line
Brushing Up on Budgeting BasicsPlanning How to Plan: Factors That Impact Your Budgeting ProcessThe Nuts and Bolts (and Washers) of BudgetingBudgeting with Cash Accounting or Accrual AccountingBudgeting to Produce the Income Statement and Balance Sheet
Chapter 7: Constant Change: Variance Analysis
Variance Analysis and BudgetingAnalyzing in Material Price and Efficiency VariancesUsing Your Findings to Make Decisions
Chapter 8: Focusing on Overhead Costs
Using Cost Allocation to Minimize OverheadPaying for the Security Guard: Fixed Overhead CostsThose Vexing Variable Manufacturing Costs
Chapter 9: What’s on the Shelf? Inventory Costing
Working with Inventoriable CostsCosting Methods for InventoryUsing Variable and Absorption Costing to Allocate Fixed Manufacturing CostsRelating Capacity Issues to Inventory
Part 3: Making Decisions
Chapter 10: Cost Drivers and Cost Estimation Methods
Working with Cost BehaviorConsidering Cost Estimation MethodsExploring Nonlinear Cost FunctionsAssessing the Impact of Learning CurvesConsidering how AI and Data Analytics Impact Learning Curves
Chapter 11: Making Smart Business Decisions with Relevant Information
Navigating the Geography of RelevanceSpecial Orders Don’t Upset Us, Do They?Deciding between Outsourcing and In-house ProductionMaximizing Profit When Capacity Is Limited
Chapter 12: Making Smart Pricing Decisions: Figuring Total Costs
Understanding Influences on PricesPricing for Profits Down the RoadArriving at a Reasonable Profit
Part 4: Allocating Costs and Resources
Chapter 13: Analysis Methods to Improve Profitability
Processing Cost AllocationImplementing Cost AllocationGoing Over Sales Mix and Sales Quantity Variances
Chapter 14: Behind the Scenes: Accounting for Support Costs and Common Costs
Not Everyone Generates Revenue: Support CostsGoing Over Variance Analysis and Department CostsFocusing on Common CostsMaking a Commitment: Contracts
Chapter 15: Joint Costs, Separable Costs, and Using Up the Leftovers
Working with Joint CostsContinuing Production: Computing Separable Costs After SplitoffChoosing a Joint Cost Allocation MethodHolding a Garage Sale: Making the Most of Byproducts
Chapter 16: Tracing Similar Products with Process Costing
Process Costing: Presenting the Basic ApproachSitting on the Factory Floor: Dealing with Work in ProcessUsing Equivalent Units to Compare Apples to ApplesUsing the Weighted Average Method for Process CostingIntroducing the First In, First Out Method of Process CostingComparing Processing Costing Methods
Part 5: Considering Quality Issues
Chapter 17: What a Waste! Getting the Most from Spoilage, Scrap, and Reworked Products
Accounting for WasteApplying Process Costing Methods to SpoilageJob Costing for Spoilage, Reworked Products, and Scrap
Chapter 18: Making Smart Ordering Decisions
Considering the Costs of InventoryCalculating Inventory Quantity with the Economic Order Quantity FormulaFiguring a Favorable Reorder PointEvaluating Prediction ErrorPracticing Just-In-Time PurchasingSCM and Customer Demand Issues
Chapter 19: Quality: Building a Better Mousetrap
Considering Quality Benefits and CostsCompiling a Cost of Quality ReportPutting Quality Practices in PlaceCustomer Satisfaction: Measuring and Improving ItDoing More in Less TimeEliminating the Constraint of the Bottleneck
Part 6: The Part of Tens
Chapter 20: Ten Common Costing Mistakes and How to Avoid Them
Pricing a Product IncorrectlyListing Fixed Costs As Variable CostsLabeling Period Costs As Product CostsMisusing Target Net IncomeForgetting About TaxesAssigning Costs to the Wrong ProductNot Reviewing Variances CorrectlyRedlining: Pushing Production Activity Above Relevant RangeIgnoring the Timing of CostsNot Implementing Activity-Based Costing
Chapter 21: Ten Ways to Increase Profits Using Costing
Selling More Of The Right ProductsImplementing Sales Mix Analysis to Increase Total ProfitsBuilding a Higher Margin of SafetyDeciding How Much You Need: Production and Scheduling IssuesWho Does What: Handling Costs and Employee IssuesReducing and Managing ScrapMoving It off the Shelf: Inventory IssuesEffectively Taking Special OrdersMaking Accurate Cost AllocationsAddressing the Issue of Spoilage
Index
About the Author
Connect with Dummies
End User License Agreement

Content preview from Cost Accounting For Dummies, 2nd Edition

Chapter 2

Brushing Up on Cost Accounting Basics

IN THIS CHAPTER

Distinguishing between direct and indirect costs

Understanding fixed and variable costs

Comparing the costs incurred in different industries

Defining a cost driver

Recognizing inventoriable costs

This chapter provides the rules of the road for cost accounting. Use these basic terms and ideas to understand more complex topics later in the book. If you read another chapter and start to get lost, head back here and take a look at these concepts again.

Understanding the Big Four Terms

Direct costs, indirect costs, fixed costs, and variable costs are the four most important cost accounting terms … and these four terms can be confusing. The following sections outline a process for understanding the differences among these words. If you follow this process, you should be able to keep these important terms straight in your mind. Ready? Let’s go!

Comparing direct and indirect costs

Direct costs are costs you can trace (or ...

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Cost Accounting For Dummies, 2nd Edition

by Kenneth W. Boyd

Brushing Up on Cost Accounting Basics