AUSTIN COMMUNITY COLLEGE
COST ACCOUNTING - ACNT 2309
(Formerly ACCT 2063)
CIP CODE AREA:† 52.0301
COURSE LEVEL:† (Intermediate-Junior Level)
COURSE TITLE:† Cost Accounting
CREDIT HOURS:† 3
PREREQUISITE:†† ACCT 2302 (or its equivalent)
METHOD OF PRESENTATION:† Three† lecture/discussion hours per week
CATALOG DESCRIPTION:† A study of budgeting and cost control systems including a detailed study of manufacturing cost accounts and reports, job order costing, and process costing.† Includes introduction to alternative costing methods such as activity-based and just-in-time costing.† Reviews planning of profit, cost, sales, cost and profit analysis, profit performance and measurement.
TEXTBOOK: ††Cost Accounting, Horngren, Foster, Datar, 10th edition, Prentice Hall
A. Nature and function of cost accounting
B. Cost terms and classifications
II. COST SYSTEMS/COST MEASUREMENT††††††††††††††††††††††††††††
A. Job Order Costing
B. Service Department Cost
C. Process Costing
D. Other issues:† scrap, spoilage, rework†††††††††††††††††††††††††††††††††††††††††††††
E. Activity Based Costing
F. Byproducts, joint products
III. ANALYZING COST BEHAVIOR†††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††
A. Cost volume profit analysis
B. Variable/Absorption costing
C. Mixed and semi-variable costs
A. Master Budget
B. Flexible Budget
C. Budget Variances ††††††††††††††††††††††††††††††††††††††††††††††
COURSE LEARNING OBJECTIVES:† Upon successful completion of this course, students should be able to -
Identify three major purposes of accounting systems.
Describe cost accounting and its relation to management accounting and financial accounting.
Distinguish between the planning and control decision of mangers.
Distinguish among the problem-solving, scorekeeping, and attention-directing roles of a management accountant.
Describe the set of business functions in the value chain.
Identify four key themes that are important to managers attaining success in their planning and control decisions.
Describe three guidelines that help management accountants increase their value to managers.
Understand how cost accounting fits into an organizationís structure.
Understand the importance of professional ethics to management accountants.
Define and illustrate a cost object.
Distinguish between direct costs and indirect costs.
Explain variable costs and fixed costs.
Interpret unit costs with caution.
Distinguish among manufacturing-, merchandising-, and service-sector companies.
Describe the three categories of inventories commonly found in manufacturing companies.
Differentiate between inventoriable costs and period costs.
Explain why different ways of computing product costs are appropriate for different purposes.
Understand basic cost-volume-profit (CVP) assumptions.
Explain essential features of CVP analysis.
Determine the breakeven point and output to achieve target operating income using the equation, contribution margin, and graph methods.
Incorporate income tax considerations into CVP analysis.
Explain the use of CVP analysis in decision making and how sensitivity analysis can help managers cope with uncertainty.
Use CVP analysis to plan costs.
Apply CVP analysis to a multiproduct company.
Adapt CVP analysis to multiple cost driver situations.
Distinguish between contribution margin and gross margin.
Describe the building block concepts of costing systems.
Distinguish between job costing and process costing.
Outline a seven-step approach to job costing.
Distinguish actual costing from normal costing.
Track the flow of costs in a job-costing system.
Prorate end-of-period under- or overallocated indirect costs using alternative methods.
Apply variations of normal costing.
Explain undercosting and overcosting of products.
Present three guidelines for refining a costing system.
Distinguish between the traditional and the ABC approaches to designing a costing system.
Describe a four-part cost hierarchy.
Cost products or services using activity-based costing (ABC).
Use ABC systems for activity-based management (ABM).
Compare ABC and department-costing systems.
Evaluate the costs and benefits of implementing ABC systems.
Define master budget and explain its major benefits to an organization.
Describe key advantages of budgets.
Prepare the operating budget and its supporting schedules.
Use computer-based financial planning models in sensitivity analysis.
Explain kaizen budgeting and its importance for cost management.
Illustrate an activity-based budgeting approach.
Describe responsibility centers and responsibility accounting.
Explain how controllability relates to responsibility accounting.
Describe the difference between a static budget and a flexible budget.
Develop a flexible budget and compute flexible-budget variances and sales-volume variances.
Compute the price and efficiency variances for direct-cost categories.
Explain why standard costs are often used in variance analysis.
Explain why purchasing performance measures should focus on more factors than just price variances.
Integrate continuous improvement into variance analysis.
Perform variance analysis in activity-based costing systems.
Describe benchmarking and how it can be used in cost management.
Explain similarities and differences in the planning of variable overhead costs and the planning of fixed overhead costs.
Identify the key features of a standard costing system.
Compute variable overhead spending and efficiency variances.
Explain how the efficiency variance for a variable indirect-cost item differs from the efficiency variance for a direct-cost item.
Compute the budgeted fixed overhead rate.
Explain two caveats to consider when interpreting the production-volume variance as a measure of the economic cost of unused capacity.
Show how the 4-variance analysis approach reconciles the actual overhead incurred with the overhead amounts allocated during the period.
Illustrate how the flexible-budget variance approach can be used in activity-based costing.
Identify the fundamental feature that distinguishes variable costing from absorption costing.
Prepare income statements under absorption costing and variable costing.
Explain differences in operating income under absorption costing and variable costing.
Understand how absorption costing can provide undesirable incentives for managers.
Differentiate throughput costing form variable costing and absorption costing.
Describe the various denominator-level capacity concepts that can be used in absorption costing.
Describe how attempts to recover fixed costs of capacity may lead to a downward demand spiral.
Explain how the choice of the denominator level affects the production-volume variance.
Explain the two assumptions frequently used in cost-behavior estimation.
Describe linear cost functions and three common ways in which they behave.
Recognize various approaches to cost estimation.
Outline six steps in estimation a cost function on the bases of current or past cost relationships.
Describe three criteria to evaluate and choose cost drivers.
Explain and give examples of nonlinear cost functions.
Distinguish between the cumulative average-time learning model and incremental unit-time learning model.
Understand data problems encountered in estimating cost functions.
Outline four purposes for allocating costs to cost objects.
Guide cost-allocation decisions using appropriate criteria.
Discuss key decisions faced when collecting costs in indirect-cost pools.
Differentiate the single-rate cost-allocation method from the dual-rate cost-allocation method.
Understand how the risks managers face are affected by the choice between budgeted versus actual cost-allocation rates.
Distinguish among direct, step-down, an reciprocal methods of allocating support department costs.
Make decisions that draw on the allocation of common costs using either the stand-alone or incremental methods.
Explain the importance of explicit agreement between parties when reimbursement is based on costs incurred.
Identify the splitoff† point(s) in a joint-cost situation.
Distinguish between joint products and byproducts.
Explain why joint costs should be allocated to individual products.
Allocate joint costs using several different methods.
Identify the criterion used to support market-based joint-cost-allocation methods.
Explain why joint costs are irrelevant in a sell-or-process further decision.
Account for byproducts using two different methods.
Determine when process-costing systems are appropriate.
Describe five key steps in process costing.
Calculate and use equivalent units.
Prepare journal entries for process-costing systems.
Demonstrate the weighted-average method of process costing.
Demonstrate the first-in, first-out (FIFO) method of process costing.
Incorporate standard costs into a process-costing system.
Apply process-costing methods to cases with transferred-in costs.
Distinguish among spoilage, rework, and scrap.
Describe the general accounting procedures for normal and abnormal spoilage.
Account for spoilage in process costing using the weighted-average method.
Account for spoilage in process costing using the first-in, first-out method.
Account for spoilage in process costing using the standard-costing method.
Account for spoilage in job costing.
Account for rework in job costing.
Account for scrap.
COURSE COMPETENCIES (SCANS):
ACQUIRES AND EVALUATES INFORMATION:† Identifies need for data, obtains it from existing sources or creates it, and evaluates its relevance and accuracy.
ORGANIZES AND MAINTAINS INFORMATION:† Organizes, processes, and maintains written or computerized records or other forms of information in a systematic fashion.†
USES COMPUTERS TO PROCESS INFORMATION:† Employs computers to acquire, organize, analyze, and communicate information.
PROBLEM SOLVING:† Recognizes that a problem exists (i.e. there is a discrepancy between what is and what should or could be), identifies possible reasons for the discrepancy, and devises and implements a plan of action to resolve it.† Evaluates and monitors progress, and revises plan as indicated by findings.