Cost Accumulation and Measurement Chapter 3 Managerial Accounting Concepts and Empirical Evidence.
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Transcript of Cost Accumulation and Measurement Chapter 3 Managerial Accounting Concepts and Empirical Evidence.
![Page 1: Cost Accumulation and Measurement Chapter 3 Managerial Accounting Concepts and Empirical Evidence.](https://reader035.fdocuments.in/reader035/viewer/2022062713/56649f475503460f94c69987/html5/thumbnails/1.jpg)
Cost Accumulation and Measurement
Chapter 3
Managerial Accounting
Concepts and Empirical Evidence
![Page 2: Cost Accumulation and Measurement Chapter 3 Managerial Accounting Concepts and Empirical Evidence.](https://reader035.fdocuments.in/reader035/viewer/2022062713/56649f475503460f94c69987/html5/thumbnails/2.jpg)
Managerial AccountingManagerial AccountingConcepts and Empirical EvidenceConcepts and Empirical Evidence
Dichotomy BetweenVariable / Fixed Costs and Direct / Indirect Costs
VariableCosts
FixedCosts
Direct Costs
Indirect Costs
![Page 3: Cost Accumulation and Measurement Chapter 3 Managerial Accounting Concepts and Empirical Evidence.](https://reader035.fdocuments.in/reader035/viewer/2022062713/56649f475503460f94c69987/html5/thumbnails/3.jpg)
Managerial AccountingManagerial AccountingConcepts and Empirical EvidenceConcepts and Empirical Evidence
Manufacturing Vs.Non-manufacturing costs
- Direct Material- Direct Labor- Indirect Costs
Inventoriable Costs
![Page 4: Cost Accumulation and Measurement Chapter 3 Managerial Accounting Concepts and Empirical Evidence.](https://reader035.fdocuments.in/reader035/viewer/2022062713/56649f475503460f94c69987/html5/thumbnails/4.jpg)
Managerial AccountingManagerial AccountingConcepts and Empirical EvidenceConcepts and Empirical Evidence
- General & Administrative- Selling- Research & Developent
- Direct Material- Direct Labor- Indirect Costs
Manufacturing Vs. Non-manufacturing costs
Period Costs
![Page 5: Cost Accumulation and Measurement Chapter 3 Managerial Accounting Concepts and Empirical Evidence.](https://reader035.fdocuments.in/reader035/viewer/2022062713/56649f475503460f94c69987/html5/thumbnails/5.jpg)
Managerial AccountingManagerial AccountingConcepts and Empirical EvidenceConcepts and Empirical Evidence
Work In Progress
Ren CorporationBasic Cost / Product Flow Chart for Manufacturing Firm
Finished Goods Cost of Goods Sold
Indirect Manufacturing Costs
Direct Manufacturing Costs
CuttingDepartment
Expanded View?
AssemblingDepartment
FinishedDepartment
![Page 6: Cost Accumulation and Measurement Chapter 3 Managerial Accounting Concepts and Empirical Evidence.](https://reader035.fdocuments.in/reader035/viewer/2022062713/56649f475503460f94c69987/html5/thumbnails/6.jpg)
Managerial AccountingManagerial AccountingConcepts and Empirical EvidenceConcepts and Empirical Evidence
Ren CorporationExpanded Cost / Product Flow Chart for Manufacturing Firm
CuttingDepartment
Direct Manufacturing Costs•Materials•Labor
Indirect Manufacturing Costs•Supplies•Supervisor’s Salary•Depreciation•Utilities•Maintenance•Insurance
AssemblingDepartment
FinishingDepartment
FinishedGoods
Costs of Goods Sold
![Page 7: Cost Accumulation and Measurement Chapter 3 Managerial Accounting Concepts and Empirical Evidence.](https://reader035.fdocuments.in/reader035/viewer/2022062713/56649f475503460f94c69987/html5/thumbnails/7.jpg)
Managerial AccountingManagerial AccountingConcepts and Empirical EvidenceConcepts and Empirical Evidence
Ren Corporation Job Costing Sheet
J ob Started: COMPLETI ON DATE :
J ob # : J OB DESCRI PTI ON : Wooden Desk
QUANTI TY : 100
Cost f or 100 Desks
100
$20.00
$2,000.00
DI RECT MATERI ALS
FI NI SHI NG
Quantity
Unit Costs
100
$1.00
CUTTI NG ASSEMBLI NG
APPLI ED OVERHEAD
4/ 15/ 94
22
CUMULATI VE TOTAL
CUMULATI VE UNI T TOTAL
DEPARTMENTAL COST
$ 2 Per Direct
Labor Hour
Cost f or 100 Desks
RateDI RECT LABOR
Hours
5/ 15/ 94
100
$5.00
$500.00$100.00
DM = Qty Unit Cost$2,000.00 = 100 $20.00
![Page 8: Cost Accumulation and Measurement Chapter 3 Managerial Accounting Concepts and Empirical Evidence.](https://reader035.fdocuments.in/reader035/viewer/2022062713/56649f475503460f94c69987/html5/thumbnails/8.jpg)
Managerial AccountingManagerial AccountingConcepts and Empirical EvidenceConcepts and Empirical Evidence
Ren Corporation Job Costing Sheet
J ob Started: COMPLETI ON DATE :
J ob # : J OB DESCRI PTI ON : Wooden Desk
QUANTI TY : 100
Cost f or 100 Desks
100
$20.00
$2,000.00
DI RECT MATERI ALS
FI NI SHI NG
Quantity
Unit Costs
100
$1.00
CUTTI NG ASSEMBLI NG
$3,000.00 $250.00 $1,200.00
100
$15.00 $5.00 $12.00
200 50
APPLI ED OVERHEAD
4/ 15/ 94
22
CUMULATI VE TOTAL
CUMULATI VE UNI T TOTAL
DEPARTMENTAL COST
$ 2 Per Direct
Labor Hour
Cost f or 100 Desks
RateDI RECT LABOR
Hours
5/ 15/ 94
100
$5.00
$500.00$100.00
DL = Hours Rate$1,200 = 100 $12.00
![Page 9: Cost Accumulation and Measurement Chapter 3 Managerial Accounting Concepts and Empirical Evidence.](https://reader035.fdocuments.in/reader035/viewer/2022062713/56649f475503460f94c69987/html5/thumbnails/9.jpg)
Managerial AccountingManagerial AccountingConcepts and Empirical EvidenceConcepts and Empirical Evidence
Ren Corporation Job Costing Sheet
J ob Started: COMPLETI ON DATE :
J ob # : J OB DESCRI PTI ON : Wooden Desk
QUANTI TY : 100
Cost f or 100 Desks
100
$20.00
$2,000.00
DI RECT MATERI ALS
FI NI SHI NG
Quantity
Unit Costs
100
$1.00
CUTTI NG ASSEMBLI NG
$3,000.00 $250.00 $1,200.00
100
$15.00 $5.00 $12.00
200 50
$400.00 $100.00 $200.00 APPLI ED OVERHEAD
4/ 15/ 94
22
CUMULATI VE TOTAL
CUMULATI VE UNI T TOTAL
DEPARTMENTAL COST
$ 2 Per Direct
Labor Hour
Cost f or 100 Desks
RateDI RECT LABOR
Hours
5/ 15/ 94
100
$5.00
$500.00$100.00
App OH = Hours OH Rate$100 = 50 $2.00
![Page 10: Cost Accumulation and Measurement Chapter 3 Managerial Accounting Concepts and Empirical Evidence.](https://reader035.fdocuments.in/reader035/viewer/2022062713/56649f475503460f94c69987/html5/thumbnails/10.jpg)
Managerial AccountingManagerial AccountingConcepts and Empirical EvidenceConcepts and Empirical Evidence
Ren Corporation Job Costing Sheet
J ob Started: COMPLETI ON DATE :
J ob # : J OB DESCRI PTI ON : Wooden Desk
QUANTI TY : 100
Cost f or 100 Desks
100
$20.00
$2,000.00
DI RECT MATERI ALS
FI NI SHI NG
Quantity
Unit Costs
100
$1.00
CUTTI NG ASSEMBLI NG
$3,000.00 $250.00 $1,200.00
100
$15.00 $5.00 $12.00
200 50
$400.00 $100.00 $200.00 APPLI ED OVERHEAD
4/ 15/ 94
22
CUMULATI VE TOTAL
CUMULATI VE UNI T TOTAL
DEPARTMENTAL COST
$ 2 Per Direct
Labor Hour
Cost f or 100 Desks
RateDI RECT LABOR
Hours
$5,400.00 $450.00 $1,900.00
5/ 15/ 94
100
$5.00
$500.00$100.00
Departmental Cost ( Cutting) = DM + DL + AOH $5,400 = $2,000 + $ 3,000 + $ 400
![Page 11: Cost Accumulation and Measurement Chapter 3 Managerial Accounting Concepts and Empirical Evidence.](https://reader035.fdocuments.in/reader035/viewer/2022062713/56649f475503460f94c69987/html5/thumbnails/11.jpg)
Managerial AccountingManagerial AccountingConcepts and Empirical EvidenceConcepts and Empirical Evidence
Ren Corporation Job Costing Sheet
J ob Started: COMPLETI ON DATE :
J ob # : J OB DESCRI PTI ON : Wooden Desk
QUANTI TY : 100
Cost f or 100 Desks
100
$20.00
$2,000.00
DI RECT MATERI ALS
FI NI SHI NG
Quantity
Unit Costs
100
$1.00
CUTTI NG ASSEMBLI NG
$3,000.00 $250.00 $1,200.00
100
$15.00 $5.00 $12.00
200 50
$400.00 $100.00 $200.00 APPLI ED OVERHEAD
4/ 15/ 94
22
CUMULATI VE TOTAL
CUMULATI VE UNI T TOTAL
DEPARTMENTAL COST
$ 2 Per Direct
Labor Hour
Cost f or 100 Desks
RateDI RECT LABOR
Hours
$5,400.00
$5,400.00
$450.00
$5,850.00
$1,900.00
$7,750.00
5/ 15/ 94
100
$5.00
$500.00$100.00
Cum Tot (Finishing)= Dept Cost (Finsh) +Cum Tot (Asm) $7,750 = $ 1,900 +$5,850
![Page 12: Cost Accumulation and Measurement Chapter 3 Managerial Accounting Concepts and Empirical Evidence.](https://reader035.fdocuments.in/reader035/viewer/2022062713/56649f475503460f94c69987/html5/thumbnails/12.jpg)
Managerial AccountingManagerial AccountingConcepts and Empirical EvidenceConcepts and Empirical Evidence
Ren Corporation Job Costing Sheet
J ob Started: COMPLETI ON DATE :
J ob # : J OB DESCRI PTI ON : Wooden Desk
QUANTI TY : 100
Cost f or 100 Desks
100
$20.00
$2,000.00
DI RECT MATERI ALS
FI NI SHI NG
Quantity
Unit Costs
100
$1.00
CUTTI NG ASSEMBLI NG
$3,000.00 $250.00 $1,200.00
100
$15.00 $5.00 $12.00
200 50
$400.00 $100.00 $200.00 APPLI ED OVERHEAD
4/ 15/ 94
22
CUMULATI VE TOTAL
CUMULATI VE UNI T TOTAL
DEPARTMENTAL COST
$ 2 Per Direct
Labor Hour
Cost f or 100 Desks
RateDI RECT LABOR
Hours
$5,400.00
$5,400.00
$54.00
$450.00
$5,850.00
$58.50
$1,900.00
$7,750.00
$77.50
5/ 15/ 94
100
$5.00
$500.00$100.00
Cum Unit Cost = Cum Tot Qty$77.50 = $ 7,750 100
![Page 13: Cost Accumulation and Measurement Chapter 3 Managerial Accounting Concepts and Empirical Evidence.](https://reader035.fdocuments.in/reader035/viewer/2022062713/56649f475503460f94c69987/html5/thumbnails/13.jpg)
Managerial AccountingManagerial AccountingConcepts and Empirical EvidenceConcepts and Empirical Evidence
Ren Corporation Job Costing Sheet
J ob Started: COMPLETI ON DATE :
J ob # : J OB DESCRI PTI ON : Wooden Desk
QUANTI TY : 100
Cost f or 100 Desks
100
$20.00
$2,000.00
DI RECT MATERI ALS
FI NI SHI NG
Quantity
Unit Costs
100
$1.00
CUTTI NG ASSEMBLI NG
$3,000.00 $250.00 $1,200.00
100
$15.00 $5.00 $12.00
200 50
$400.00 $100.00 $200.00 APPLI ED OVERHEAD
4/ 15/ 94
22
CUMULATI VE TOTAL
CUMULATI VE UNI T TOTAL
DEPARTMENTAL COST
$ 2 Per Direct
Labor Hour
Cost f or 100 Desks
RateDI RECT LABOR
Hours
$5,400.00
$5,400.00
$54.00
$450.00
$5,850.00
$58.50
$1,900.00
$7,750.00
$77.50
5/ 15/ 94
100
$5.00
$500.00$100.00