Beruflich Dokumente
Kultur Dokumente
Cost Accounting
acct403/teddyok/2018-19/Bsc Slide 2
Costing Techniques (slide 1 of 3) LO1
acct403/teddyok/2018-19/Bsc Slide 3
Costing Techniques (slide 2 of 3) LO1
acct403/teddyok/2018-19/Bsc Slide 4
Costing Techniques (slide 3 of 3) LO1
acct403/teddyok/2018-19/Bsc Slide 5
Absorption Costing (slide 1 of 3) LO2
» Absorption (or full or total or conventional) costing charges products with all
manufacturing (or production) costs, regardless of whether the costs are fixed
or variable.
– Cost per unit of a product or service consists of all four types of manufacturing costs –
direct material, direct labour, variable manufacturing overhead, and fixed manufacturing
overhead costs.
– The valuation of inventories and work-in-progress contains both fixed and variable cost
elements.
» Absorption costing classify and presents costs by management function.
– Expenses are presented on income statement according to their functional classification
– production, selling, general and administrative expenses etc.
– Financial accounting employs full costing in presenting external financial reports.
acct403/teddyok/2018-19/Bsc Slide 6
Absorption Costing (slide 2 of 3) LO2
acct403/teddyok/2018-19/Bsc Slide 7
Absorption Costing (slide 3 of 3) LO2
acct403/teddyok/2018-19/Bsc Slide 8
Variable Costing (slide 1 of 3) LO2
acct403/teddyok/2018-19/Bsc Slide 9
Variable Costing (slide 2 of 3) LO2
acct403/teddyok/2018-19/Bsc Slide 10
Variable Costing (slide 3 of 3) LO3
acct403/teddyok/2018-19/Bsc Slide 11
Product cost Determination (slide 1 of 3) LO3
Absorption Variable
Costing Costing
Direct Materials
Product
Product
Direct Labor
Costs
Costs
Variable Manufacturing Overhead
acct403/teddyok/2018-19/Bsc Slide 12
Product Cost Determination (slide 2 of 3) LO3
Solution
Cost per unit for production and ending inventory Cost per unit for beginning inventory
acct403/teddyok/2018-19/Bsc Slide 14
Income Statement Presentation Format (slide 1 of 1) LO3
acct403/teddyok/2018-19/Bsc Slide 15
Absorption and Variable Costing Income (slide 1 of 7) LO4
acct403/teddyok/2018-19/Bsc Slide 16
Absorption and Variable Costing Income (slide 2 of 7) LO4
acct403/teddyok/2018-19/Bsc Slide 17
Absorption and Variable Costing Income (slide 3 of 7) LO4
acct403/teddyok/2018-19/Bsc Slide 18
Absorption and Variable Costing Income (slide 4 of 7) LO4
acct403/teddyok/2018-19/Bsc Slide 19
Absorption and Variable Costing Income (slide 5 of 7) LO4
acct403/teddyok/2018-19/Bsc Slide 20
Product Cost Determination (slide 2 of 3) LO3
Solution
acct403/teddyok/2018-19/Bsc Slide 22
Absorption and Variable Costing Income (slide 7 of 7) LO4
Solution
Variable Costing
Sales (20,000 × GH¢30) 600,000
Less variable expenses:
Beginning inventory (2,000 x GH¢9) 18,000
Add COGM (25,000 × GH¢10) 250,000
Goods available for sale 268,000
Less ending inventory (7,000 × GH¢10) 70,000
Variable cost of goods sold 198,000
Variable selling & administrative
expenses (20,000 × GH¢3) 60,000 258,000
Contribution margin 342,000
Less fixed expenses:
Manufacturing overhead 150,000
Selling & administrative expenses 100,000 250,000
Net operating income 92,000
acct403/teddyok/2018-19/Bsc Slide 23
Reconciling Absorption and Variable Costing Net LO4
Income (slide 1 of 2)
Variable costing net operating income xxx
acct403/teddyok/2018-19/Bsc Slide 24
Reconciling Absorption and Variable Costing Net LO4
Income (slide 2 of 2)
Solution
acct403/teddyok/2018-19/Bsc Slide 25
End of Lessons