Manufacturing Cost Accounting FMGT 7221

Learning Outcomes

Upon successful completion, the student will be able to:

• Describe the purposes for which the manager needs accounting information.
• Identify and give examples of cost types and classifications according to differing management needs.
• Distinguish between process costing and job-order costing and identify companies that would use each costing method.
• Compute and apply predetermined overhead rates.
• Use a job-order costing system.
• Use both the weighted average and FIFO methods of process costing.
• Identify examples of variable and fixed costs and explain the effect of a change in activity on both total costs and unit costs.
• Analyse a mixed cost by the high-low method and the least-squares method.
• Prepare an income statement using the contribution format.
• Compute the breakeven point and use CVP formulas to determine the activity level needed to achieve a desired target net profit figure.
• Prepare income statements using both variable and absorption costing and reconcile the two net income figures.
• Prepare all the components of a master budget.
• Explain how flexible manufacturing systems and just-in-time purchasing and production affect cost accounting systems.
• Compute variances from standard cost and explain their significance.
• Prepare performance reports incorporating flexible budgets.
• Prepare a segmented income statement using the contribution format, and explain the difference between traceable fixed costs and common fixed costs.
• Compute the return on investment and residual income.
• Identify three ways that transfer prices can be set and use the transfer pricing formula to compute an appropriate transfer price between segments.
• Prepare an analysis showing whether a product line or other organizational segment should be dropped or retained.
• Prepare a make or buy analysis.
• Make appropriate computations to determine the most profitable utilization of scarce resources.
• Prepare an analysis showing whether joint products should be sold at the slit-off point or processed further.
• Determine the acceptability of an investment project using the net present value method and the internal rate of return method.

Effective as of Fall 2003

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