Cost Accounting - class notes PDF

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Chapter 1 Objectives 1. Cost objects: direct costs and indirect costs. 2. Manufacturing Costs: DM, DL, MOH. 3. Product costs and period costs. 4. Variable costs, fixed costs, and mixed costs. 5. FC, VC, Mixed Costs 6. Income Statement 7. Differential costs, opportunity costs, and sunk costs. 8. Four types of quality costs

Product cost = Direct Material + Direct Labor + Fixed MH + VMOH Period cost = Fixed & Variable Administrative Expenses + Fixed & Variable Selling Expenses + Sales Commission Variable cost = DM + DL + VMOH + Variable Administrative Expenses + Sales Commission Average Fixed MOH = (FMOH * Average Units)/Units Produced The fixed cost as total remains same though there is change in relevant range of production. Total MOH = average units*FMOH + units produced*VMOH DM + DL per unit = direct cost per unit. DC * number of units produced = total direct cost VMOH * Units Produced + FMOH = total indirect cost To produce +1 units → DM + DL + VMOH. FMOH is irrelevant because it is fixed to the average units produce Direct Costs that can be easily and conveniently traced to a unit of product or other cost object. Indirect Costs that cannot be easily and conveniently traced to a unit of product or other cost object. Manufacturing Overhead, Indirect costs incurred to support a number of cost objects. These costs cannot be traced to any individual cost object.

Chapter 5 Net Income (NI) = Total Revenue - Total Cost Total Revenue = Number of Units Sold (Q) * Selling Price Per Unit (P) Total Cost = Total Variable Cost + Total Fixed Cost Total Variable Cost = Variable Cost Per Unit (V) * Number of Units Sold (Q) NI = (P-V)*Q - FC

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