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Absorption Costing
 
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This video explains the concept of Absorption Costing in Managerial Accounting. A comprehensive example is provided to explain how absorption costing is used to calculate per unit product costs as well as to create an absorption costing income statement. The video also contrasts the absorption costing method with the variable cost method and discusses how the use of absorption costing can lead to distorted measures of profitability and perverse managerial incentives. Edspira is your source for business and financial education. To view the entire video library for free, visit http://www.Edspira.com To like us on Facebook, visit https://www.facebook.com/Edspira Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. The goal of Michael's life is to increase access to education so all people can achieve their dreams. To learn more about Michael's story, visit http://www.MichaelMcLaughlin.com To follow Michael on Facebook, visit https://facebook.com/Prof.Michael.McLaughlin To follow Michael on Twitter, visit https://twitter.com/Prof_McLaughlin
Views: 209679 Edspira
Absorption Costing And Variable Costing | Accounting | Chegg Tutors
 
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Absorption costing, which is required by generally accepted accounting principles (GAAP), includes all variable and fixed production costs in the calculation of product cost. Variable costing, which is used to supplement managerial decision making, includes only variable production costs. Long term, a business must recover its fixed production costs. However, including these costs in product cost analysis can lead to incorrect conclusions. For example, a product might have variable costs of $4 and fixed costs of $1. If the producer is approached to sell additional units at a discount price of $4.50, and there will be no increase in fixed costs, it may make sense to do so. If the producer accepts this offer, overall profit will increase by $0.50 for each additional unit sold. -------- Accounting tutoring on Chegg Tutors Learn about Accounting terms like Absorption Costing And Variable Costing on Chegg Tutors. Work with live, online Accounting tutors like Nathan G. who can help you at any moment, whether at 2pm or 2am. Liked the video tutorial? Schedule lessons on-demand or schedule weekly tutoring in advance with tutors like Nathan G. Visit: https://www.chegg.com/tutors/Accounting-online-tutoring/?utm_source=youtube&utm_medium=video&utm_content=managed&utm_campaign=videotutorials ---------- About Nathan G., Finance tutor on Chegg Tutors: Texas State, Class of 2010 Finance/Accounting major Subjects tutored: Accounting TEACHING EXPERIENCE: Educated from Texas State University, I received my BBA Accounting in 2010. During college, I would often study with classmates. I noticed how much I enjoyed helping them with Accounting. I then knew I had a skill underutilized. My passion for tutoring fuels my desire to see you succeed. With over 7 years of instructional experience, I will provide the tools to help you master Accounting. Check out my YouTube Channel to learn more about EXTRACURRICULAR INTERESTS I am a man of many tastes. I really enjoy technology, racquetball, basketball, real estate investing practices, web development, and comedy! I love diversifying my interests so I never get bored lol. Hope to hear from you soon! We'll setup a plan to help you succeed in Accounting. Want to book a private lesson with Nathan G.? Message Nathan G. at https://www.chegg.com/tutors/online-tutors/Nathan-G-862370/?utm_source=youtube&utm_medium=video&utm_content=managed&utm_campaign=videotutorials ---------- Like what you see? Subscribe to Chegg's Youtube Channel: http://bit.ly/1PwMn3k ---------- Visit Chegg.com for purchasing or renting textbooks, getting homework help, finding an online tutor, applying for scholarships and internships, discovering colleges, and more! Learn more at https://www.chegg.com/ FB: https://www.facebcook.com/chegg Twitter: https://www.twitter.com/chegg Instagram: https://www.instagram.com/chegg
Views: 30883 Chegg
Absorption Costing vs. Variable Costing
 
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This video explains the difference between Absorption Cost and Variable Costing in the context of managerial accounting. The key functional difference between these two methods is the way in which fixed overhead is classified, and the video provides an example to illustrate how this difference leads to substantial discrepancies in the calculation of product costs, cost of goods sold, and profitability. The video then summarizes the benefits and drawbacks of Absorption Costing and Variable Costing. Edspira is your source for business and financial education. To view the entire video library for free, visit http://www.Edspira.com To like us on Facebook, visit https://www.facebook.com/Edspira Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. The goal of Michael's life is to increase access to education so all people can achieve their dreams. To learn more about Michael's story, visit http://www.MichaelMcLaughlin.com To follow Michael on Facebook, visit https://facebook.com/Prof.Michael.McLaughlin To follow Michael on Twitter, visit https://twitter.com/Prof_McLaughlin
Views: 116964 Edspira
Variable Costing (the Variable Costing method in Managerial Accounting)
 
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This video explains the Variable Costing method that some manufacturing firms use internally to compute product costs and calculate cost of goods sold. An example is provided to illustrate how to use Variable Costing to calculate the product cost per unit and to create a Variable Costing Income Statement. The video also discusses the difference between Variable Costing and Absorption Costing and explains why Variable Costing is in many ways superior to Absorption Costing. Edspira is your source for business and financial education. To view the entire video library for free, visit http://www.Edspira.com To like us on Facebook, visit https://www.facebook.com/Edspira Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. The goal of Michael's life is to increase access to education so all people can achieve their dreams. To learn more about Michael's story, visit http://www.MichaelMcLaughlin.com To follow Michael on Facebook, visit https://facebook.com/Prof.Michael.McLaughlin To follow Michael on Twitter, visit https://twitter.com/Prof_McLaughlin
Views: 69102 Edspira
Variable and Absorption Costing - Lesson 1
 
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In 4.06 Variable and Absorption Costing – Lesson 1, Roger Philipp, CPA, CGAM, gives a high-energy conceptual whiteboard demonstration on the two most commonly-used types of income statements for manufacturing companies. After just five minutes you'll have a better understanding of the differences between absorption costing (GAAP) and variable costing (non-GAAP, internal use) income statements. One first subtracts product costs from revenue, then subtracts period costs from this gross margin to arrive at pretax operating income. The other subtracts variable costs from revenue, then subtracts fixed costs from this contribution margin to arrive at pretax operating income. Roger warns that the operating income amounts will never be the same due to the different methods’ treatment of fixed Cost of Goods Sold and fixed manufacturing costs. Roger also explains why contribution margin is called contribution margin while looking ahead to breakeven analysis, which is covered later in BEC. In this particular lesson, Roger sets the stage for Lesson 2, where the differences between variable and absorption costing will be shown through specific examples. Connect with us: Website: https://www.rogercpareview.com Blog: https://www.rogercpareview.com/blog Facebook: https://www.facebook.com/RogerCPAReview Twitter: https://twitter.com/rogercpareview LinkedIn: https://www.linkedin.com/company/roger-cpa-review Are you accounting faculty looking for FREE CPA Exam resources in the classroom? Visit our Professor Resource Center: https://www.rogercpareview.com/professor-resource-center/ Video Transcript Sneak Peek: Okay now let's talk about variable verse absorption costing. Now these are two different basic ways of presenting an income statement for a manufacturing company. Looking at this we're gonna have absorption costing which absorbs certain costs. This is what GAP says. This is for external reporting purposes. This is product versus period costs versus direct variable prime contribution margin income statement. This is sales minus variable equals contribution margin minus fixed equals your pretax operative income. This one separates variable from fixed costs.
Views: 49462 Roger CPA Review
X. H. Variable Costing  Product Cost per Unit.wmv
 
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Illustration of the calculation of product cost per unit under Variable Costing.
Views: 11732 PamelaDJonesWCU
Variable and Absorption Costing - Lesson 2
 
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In Lecture 4.06 Variable and Absorption Costing, Lesson 2, Roger Philipp, CPA, demonstrates an example of the differences between absorption costing (GAAP) income statements and variable costing (non-GAAP, internal use) income statements. If you remember from Lesson 1, operating income will differ between the two because of how each method treats fixed Cost of Goods Sold and fixed manufacturing costs. There is a timing difference with both: absorption costing allows fixed manufacturing costs to get capitalized or absorbed into ending inventory, thus delaying the expense until the inventory is sold, while variable costing requires that the fixed manufacturing costs (sunk costs) to get expensed immediately. Under variable costing, only variable costs are considered inventoriable costs. By contrast, all product costs – both fixed and variable – are considered inventoriable costs under absorption costing. In this lesson, Roger takes us through an operating income example for a manufacturing company under both methods. He also breaks down manufacturing costs per unit between direct materials, direct labor, variable overhead, and fixed overhead, then demonstrates how the per-unit cost makes the operating income difference inevitable. Cost accounting has never been so easy! Connect with us: Website: https://www.rogercpareview.com Blog: https://www.rogercpareview.com/blog Facebook: https://www.facebook.com/RogerCPAReview Twitter: https://twitter.com/rogercpareview LinkedIn: https://www.linkedin.com/company/roger-cpa-review Are you accounting faculty looking for FREE CPA Exam resources in the classroom? Visit our Professor Resource Center: https://www.rogercpareview.com/professor-resource-center/ Video Transcript Sneak Peek: So let us pretend that I've got some numbers and I'll put them on this side. So let’s say over here I've got direct materials, direct labor, variable overhead, fixed overhead. Absorption and direct, okay. Let's say I've got $2.00 of direct materials. I've got a $1.25 of direct labor. I've got $.75 of variable overhead. And I have $1.20 of fixed overhead. This is for absorption purposes.
Views: 22840 Roger CPA Review
Absorption Costing - Costs and Costing Techniques - Learn Accounting Online
 
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COSTS AND COSTING TECHINQUES The different elements of costs are materials, labour and expenses. The elements of costs can broadly be put into two categories. 1. Fixed costs 2. Variable costs Fixed cost are those which do not vary, but remain constant within a given period of time, inspite of fluctuations in production. The examples of fixed costs are rent, insurance charges, management salaries, etc. On the other hand, variable costs are those which vary in direct proportion to any change in the volume of output. The costs of direct material, direct wages etc, can be put into this category. The cost of a product can be ascertained by any of the following two costing techniques: 1. Absorption costing Technique 2. Marginal Costing Techigue Absorbtion costing technique is also termed as ''TRADITIONAL or FULL COST METHOD''. According to this method, the cost of a product is determined after considering both fixed and variable costs. The variable costs, such as those of direct materials, direct labour, etc. are directly charged to the products, while the fixed costs are approportioned on a suitable basis over different products, manufactured during a period. Thus, in the case of absorption costing, all costs are identified with the manufactured products. Advantages of absorption costing: It recognizes the importance of fixed costs in production. This method is accepted by Inland revenue, as stock is not undervalued. This method is always used to prepare financial accounts. When production remains constant, but sales fluctuate absorption costing will show less fluctuation in net profit. Unlike marginal costing, where fixed costs are agreed to change into variable cost, it is cost into the stock value, hence distorting stock valuation. Disadvantages of absorption costing: It assumes that prices are simply a function of costs. It does not take the account of demand. It includes past costs which may not be relevant to the pricing decision at hand. It does not provide information which aids decision-making in a rapidly changing market environment.As the manager's emphasis is on total cost, the cost-volume-profit relationship is ignored. The manager needs to use his intuition to make the decision.
Views: 58806 Alternate Learning
Absorption Costing Example
 
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This video provides an example of how to calculate a company's operating profit or loss when Absorption Costing is used in Managerial Accounting. To calculate operating profit or less with Absorption Costing, you subtract operating expenses from operating revenues. Fixed manufacturing overhead is treated as a product cost, which means that changes in inventory could affect the company's operating profit or loss. For example, if the company produces more units than it sells in a period, some of the fixed manufacturing overhead will be deferred to a future period instead of being expensed in the current period. This is a key distinction from Variable Costing; under Variable Costing, all fixed manufacturing overhead costs are treated as period costs and are expensed immediately. Edspira is your source for business and financial education. To view the entire video library for free, visit http://www.Edspira.com To like Edspira on Facebook, visit https://www.facebook.com/Edspira To sign up for the newsletter, visit http://Edspira.com/register-for-newsletter Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. The goal of Michael's life is to increase access to education so all people can achieve their dreams. To learn more about Michael's story, visit http://www.MichaelMcLaughlin.com To follow Michael on Twitter, visit https://twitter.com/Prof_McLaughlin To follow Michael on Facebook, visit https://www.facebook.com/Prof.Michael.McLaughlin
Views: 498 Edspira
Cost Behavior: Fixed, Variable, Mixed, and Step Costs
 
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This video describes the way four different types of costs behave: Variable, Fixed, Mixed and Step. ********************************************************** C’s get degrees, but they don’t get jobs. College is about earning a high GPA and getting the knowledge you need to succeed in your career. To get that knowledge you need to do the reading for your classes, but we all know it’s boring and time-consuming. What if I told you you could eliminate up to 80% of the reading required in your classes, while actually doing better on your exams? Learn more at https://www.collegesuccesshacks.com ******************* NEED MORE HELP? *********************** For more help with cost behavior?: Variable Cost: https://accountinginfocus.com/managerial-accounting-2/cost-behavior/variable-cost/ Fixed Cost: https://accountinginfocus.com/managerial-accounting-2/cost-behavior/fixed-cost/ Mixed Cost: https://accountinginfocus.com/managerial-accounting-2/cost-behavior/mixed-cost/ Mixed Cost and the High-Low Method: https://accountinginfocus.com/managerial-accounting-2/cost-behavior/mixed-cost-and-the-high-low-method/ Introduction to Fixed and Variable Costs: https://accountinginfocus.com/managerial-accounting-2/cost-behavior/cost-behavior-introduction-to-fixed-and-variable-costs/ For more help with your managerial/cost accounting course: https://accountinginfocus.com/managerialcost-accounting/ For information about Accounting In Focus: https://accountinginfocus.com *************** FREE 30-MINUTE TUTORING SESSION ************* Get great tutoring at an affordable price with Chegg. Use our affiliate link to get your first 30 minutes FREE. http://chggtrx.com/click.track?CID=286409&AFID=424689&ADID=1873486&SID ********************** FOLLOW ME *************************** Facebook: Facebook.com/accountinginfocus Twitter: Twitter.com/KristinLIngram Instagram: Instagram.com/KristinIngramCPA
Views: 39066 Kristin Ingram
Activity Based Costing vs. Traditional Costing
 
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This video discusses the key differences between Activity Based Costing and traditional costing systems in the context of managerial accounting. Edspira is your source for business and financial education. To view the entire video library for free, visit http://www.Edspira.com To like us on Facebook, visit https://www.facebook.com/Edspira Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. The goal of Michael's life is to increase access to education so all people can achieve their dreams. To learn more about Michael's story, visit http://www.MichaelMcLaughlin.com To follow Michael on Facebook, visit https://facebook.com/Prof.Michael.McLaughlin To follow Michael on Twitter, visit https://twitter.com/Prof_McLaughlin
Views: 151241 Edspira
Variable vs Absorption Costing Part 1
 
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The links to the problems are no longer working. If you want updated videos (with working links) try this playlist: https://youtu.be/2eG_UVdoJrA In this video series, we discuss variable vs absorption costing and do an example. This video and the attached worksheet were prepared by Tony Bell of Thompson Rivers University (TRU) - I encourage educators to freely use, edit and modify these videos and the attached worksheet - they are available under Creative Commons Licenses.
Views: 46260 Tony Bell
Accounting Marginal and Absorption Costing
 
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Marginal and Absorption Costing
Views: 98302 david hopcroft
Product Costs and Period Costs
 
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This video provides a relatively simple, qualitative explanation of how expenses are categorized as either product (manufacturing) costs versus period (non-manufacturing) costs within a production firm and is intended for students just beginning a course in managerial accounting.
Views: 38659 The Accounting Tutor
Absorption Costing and Variable Costing | Managerial Accounting | CMA Exam | Ch 6 P 1
 
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absorption costing, fixed manufacturing overhead, variable costing, fixed cost, variable cost, Underapplied overhead, overapplied overhead,Direct cost, indirect cost, common cost, manufacturing overhead cost, indirect material, indirect labor, selling cost, administrative cost, product cost, period costs, prime cost, conversion cost, variable cost, fixed cost, committed fixed cost, discretionary fixed cost, relevant range,
Managerial Accounting - Absorption vs. Direct/Variable Costing - Severson
 
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See the below link for more resources, including as a list of all of my videos, practice exercises, Excel templates, and study notes. https://www.dropbox.com/s/09hdhag3zieyt08/Severson%20YouTube%20Videos.xlsx?dl=0 This video discusses the various differences between the absorption costing method and the direct/variable costing method in managerial accounting. These methods are important to properly understand how product costs such as direct materials, direct labor, and manufacturing overhead are treated on the income statement. This focuses on the classifications of variable versus fixed costs. It also shows the two separate types of income statements used under these two methods, including the contribution margin format, and the traditional format with cost of goods sold.
What is the unit product cost under absorption costing
 
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What is the unit product cost under absorption costing - Find out more explanation for : 'What is the unit product cost under absorption costing' only from this channel. Information Source: google
Views: 14 moibrad2a
Absorption Costing vs Marginal Costing
 
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Illustration of differences between Absorption Costing and Marginal Costing. To view the whole course please visit: http://bit.ly/1TngejS
Views: 14917 Viral ACCA
Variable and Absorption Costing: Class Questions
 
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Using CPA Exam-style questions, Roger Philipp, CPA, breaks down operating income and product costs vs. period costs under direct costing (or variable costing) and absorption costing. Under both methods, all Sales General and Administrative (SG&A) costs are expensed immediately as period costs. The difference between the two lies in the treatment of fixed manufacturing overhead. Roger demonstrates this scenario by working through the following questions in the video: • If a company has fixed manufacturing costs of $100,000 and variable selling costs of $80,000, how much of the costs will be classified as product costs and how much as period costs under direct costing? • If a company at the close of its first year of operations has 1,000 units of inventory on hand, and its fixed and variable manufacturing costs per unit were $90 and $20, respectively, how much higher would the company’s pretax income be under absorption costing vs. direct costing? The answers are revealed within the video. Finally, Roger summarizes the differences between the two types of income statements for manufacturing companies. He explains why operating income will be higher under absorption costing/ lower under variable costing when production is greater than sales and why operating income will be lower under absorption costing/higher under variable costing when sales are greater than production. Connect with us: Website: https://www.rogercpareview.com Blog: https://www.rogercpareview.com/blog Facebook: https://www.facebook.com/RogerCPAReview Twitter: https://twitter.com/rogercpareview LinkedIn: https://www.linkedin.com/company/roger-cpa-review Are you accounting faculty looking for FREE CPA Exam resources in the classroom? Visit our Professor Resource Center: https://www.rogercpareview.com/professor-resource-center/ Video Transcript Sneak Peek: All right, let's do some questions to practice absorption versus direct costing. All right, question number eight. It says K Co, the K Co's fixed manufacturing overhead costs totaled $100,000 and variable selling costs totaled $80,000. Under direct costing, that's direct, prime, variable, contribution costing, how should these costs be classified? All right, period costs, product costs.
Views: 5680 Roger CPA Review
Absorption Costing - How to calculate absorption rate (in HD!)
 
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Learn to find out budgeted overhead predetermined absorption rates for production departments. Absorption rate is used to absorb overheads into products.
Views: 31014 Accounting Notes
3 Types of Manufacturing Costs (Direct Materials, Direct Labor, Manufacturing Overhead)
 
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This videos identifies and defines the three types of manufacturing costs: Direct Materials, Direct Labor, and Manufacturing Overhead. The video also provides examples of each type of manufacturing cost to better illustrate the concepts. Edspira is your source for business and financial education. To view the entire video library for free, visit http://www.Edspira.com To like us on Facebook, visit https://www.facebook.com/Edspira Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. The goal of Michael's life is to increase access to education so all people can achieve their dreams. To learn more about Michael's story, visit http://www.MichaelMcLaughlin.com To follow Michael on Facebook, visit https://facebook.com/Prof.Michael.McLaughlin To follow Michael on Twitter, visit https://twitter.com/Prof_McLaughlin
Views: 135771 Edspira
Product Costs in Manufacturing (aka Inventoriable Costs)
 
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This video explains the concept of product costs (aka inventoriable costs) for a manufacturing firm. An example is provided to illustrate how product costs attach to a product (first as inventory, then later through cost of goods sold), as opposed to period costs which are expensed as incurred (and thus are not attached to the product or affected by its flow). Edspira is your source for business and financial education. To view the entire video library for free, visit http://www.Edspira.com To like us on Facebook, visit https://www.facebook.com/Edspira Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. The goal of Michael's life is to increase access to education so all people can achieve their dreams. To learn more about Michael's story, visit http://www.MichaelMcLaughlin.com To follow Michael on Facebook, visit https://facebook.com/Prof.Michael.McLaughlin To follow Michael on Twitter, visit https://twitter.com/Prof_McLaughlin
Views: 30075 Edspira
Absorption Costing__Keep It Simple
 
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Subscribe and watch more on MINDMAPLAB: http://bit.ly/2J6Eggr Chat with the Creator: https://youtu.be/addme/LnvNDhGxDRv44QZFZWV00f3pDLduXQ http://www.MindMapLab.com presents the most simplified video of #AbsorptionCosting you have ever watched. The #mindmaplab is an educational platform where you can get the summarized/simplified form ( covering all the areas ) of lengthy and complex subjects/chapters which otherwise most of us finds difficult to absorb at the first sight. Everything you read on mindmaplab was written by someone who wanted to help someone else. Visit our website:http://www.mindmaplab.com Join us on: https://www.facebook.com/mindmaplab https://www.instagram.com/mindmaplab https://www.twitter.com/mindmaplab About this video: Absorption Costing Absorption costing is a system of costing which measures cost of a product or a service as its direct costs and variable production overheads plus a share of fixed production overhead costs. Reporting profit with absorption costing Sales Opening Inventory – at full cost of production Direct Material Direct Labour Production Overheads (fixed and variable) Less: Closing Inventory Full Production cost of sales (Under)/over absorption Overhead absorbed Overhead incurred over absorbed Non-Production Overheads Administration, Selling and Distribution cost Profit Advantages of Absorption costing • Inventory values include an element of fixed production overheads. • Calculating under/over absorption of overheads may be useful in controlling fixed overhead expenditure. Disadvantages of Absorption costing • More complex costing system than marginal costing. • It does not provide information that is useful for decision making Comparison between Absorption costing and Marginal costing • The profit calculated with marginal costing is different from the profit calculated with absorption costing. • The difference in profit is due to entirely to the differences in the inventory valuation; as in absorption costing inventory cost includes a share of fixed production overheads i,e opening inventory contains fixed production overheads incurred in last period which is written off in the current period and closing inventory contains fixed production overheads that was incurred in this period but carried forward to be written off in the next period. • When there is no change in the opening and closing inventory, exactly same profit will be reported using marginal costing and absorption costing.  When there’s an Increase in inventory (i.e. closing inventory is greater than opening):  It reduces cost of sales and increases profit.  The absorption profit will be higher.  When there’s a Decrease in inventory (i,e closing inventory is greater than opening):  It reduces cost of sales and increases profit.  The absorption profit will be higher. Profit Reconciliation: Between Absorption and Marginal costing To calculate the difference between reported profits using marginal costing and the reported profit using absorption costing follow simple calculations: Step I • Calculate increase/decrease in inventory during the period in units: (opening inventory absorption & marginal minus closing inventory absorption marginal). Step II • Calculate fixed production overhead cost per unit. Step III • The difference in profit is the increase or decrease in inventory quantity multiplied by the fixed production cost per unit. Hashtags: #accounting, #acca, #ifrs, #videolectures, #tutorial, #charteredaccountant, #gaap #lsbf #education #icai #icap #icaew #ifrsbox #icaa #icab #cica #aicpa #ican #saica #casrilanka #capakistan
Views: 127 MindMap
Period Costs
 
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This video explains the concept of period costs in managerial and cost accounting. Period costs include things like SG&A expense, and these costs differ from product costs in that they are expensed as incurred (wherewas product costs attach to the product as inventory and flow out of the firm when the product is sold as Cost of Goods Sold). Edspira is your source for business and financial education. To view the entire video library for free, visit http://www.Edspira.com To like us on Facebook, visit https://www.facebook.com/Edspira Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. The goal of Michael's life is to increase access to education so all people can achieve their dreams. To learn more about Michael's story, visit http://www.MichaelMcLaughlin.com To follow Michael on Facebook, visit https://facebook.com/Prof.Michael.McLaughlin To follow Michael on Twitter, visit https://twitter.com/Prof_McLaughlin
Views: 33520 Edspira
73.  Managerial Accounting Ch8 Pt1: Variable Costing
 
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Learning Objectives covered: 1. Identify how variable costing differs from absorption costing, and compute unit product costs under each method. 2. Prepare income statements using both variable and absorption costing. Text used: Managerial Accounting Tenth edition Garrison et al. Publisher: McGrawHill
Views: 3032 Mark Meldrum
ACCA F2 Management Accounting Absorption Costing Method Overview
 
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This video explains how organisation can use absorption costing method to absorb the overhead expense into the product costs. If you want to study ACCA F2 with us, please enroll in the course here: http://www.globalapc.com/course-shop/ APC is ACCA gold learning provider.
Costs of Production- Microeconomics 3.3 (Part 1)
 
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In this video I explain the costs of production including fixed costs, variable costs, total cost, and marginal cost. Make sure that you know how to calculate the per unit costs: AVC, AFC, and ATC. Let me know what you think and please subscribe. Get the Ultimate Review Packet http://www.acdcecon.com/#!review-packet/czji Next video-drawing the cost curves https://www.youtube.com/watch?v=qYKJdooEnwU Watch Episodes of Econmovies- https://www.youtube.com/playlist?list=PL1oDmcs0xTD9Aig5cP8_R1gzq-mQHgcAH More videos about the costs of production- https://www.youtube.com/playlist?list=PLE70CA726102FB294
Views: 805862 Jacob Clifford
78.  Managerial Accounting Ch8 Ex Pt3: Absorption vs Variable Costing
 
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Exercises: 8-5: Variable Costing Unit Product Cost and Income Statement: Break-Even 8-6: Absorption Costing Unit Product Cost; Income Statement Text Used Managerial Accounting Tenth edition Garrison et al. Publisher: McGrawHill
Views: 1097 Mark Meldrum
Product Cost per Unit - Determine Relevant Costs - CSUN Gateway Managerial Accounting - Problem 13
 
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Please buy a copy of Scholarships: Quick and Easy: https://www.amazon.com/Scholarships-Devon-Patrick-Scott-Coombs/dp/1530670330/ref=tmm_pap_swatch_0?_encoding=UTF8&qid=&sr= Devon Coombs explains how to determine relevant product costs per unit when given multiple product costs. Follow the link below for the question in this video: http://www.csun.edu/sites/default/files/managerialquiz.pdf Follow me on Twitter and LinkedIn: https://twitter.com/devonpscoombs https://www.linkedin.com/in/devoncoombs Please subscribe to my channel :)
Views: 10880 Business Core Tutoring
Marginal & Variable Costing – Part 1 of 4 by Vijay Adarsh | Cost Accounts |B.Com (HINDI | हिंदी)
 
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Marginal Cost: - The variable cost of one unit of a product or a service. Marginal Costing: - A principle whereby variable costs are charged to cost units and the fixed cost attributable to the relevant period is written off in full against contribution for that period. What to Study in this Chapter 1) Marginal Cost 2) Marginal Costing and Differential Costing 3) Segregation of semi-variable Overheads 4) Contribution 5) Profit/Volume Ratio (P/V Ratio) 6) Key Factor 7) Break-even Analysis 8) Break-even Chart 9) Angle of Incidence 10) Margin of Safety 11) Advantage of Marginal Costing 12) Limitation of Marginal Costing 13) Application of Marginal Costing Technique About Vijay Adarsh: Vijay Adarsh (CEO and Director of StayLearning) is a Successful Teacher and Famous Coach. He is the most enthusiastic, dynamic, informative and result oriented coach. He is a commerce graduate from Delhi University. After completing B.com (Hons), he completed his post-graduation and now pursuing PhD. He started teaching students of and motivating people at the age of 17 and possesses a vast experience of teaching more than 45,000 hrs. He has simplified subjects and made it very interesting, Learning with Fun and Easy for the students. His easy class notes, beautiful animated & graphic presentations are popular among the students. He is popular among the student community for possessing the excellent ability to communicate the concepts in analytical and graphical way. He has conducted many seminars & workshops on various topics for Students, Teachers, Schools, Businessman, Housewife, Income Tax Offices, Doctors, CA's and Corporate Houses. He is also the author of several Books, e-Books, Motivational Articles & Stories Books and Launched many Audio & Video Programs. About Video Lectures: Video Lectures for Cost Accounting by Vijay Adarsh evolved as utility services for our own students. We had thought that recorded lecture would be an excellent reinforcement tool for the students and it proved to be exactly that. We have video lectures for Class 11th, 12th, B.Com (H/P), M.Com, MBA examination. These are our classroom lectures which form a very good source of study material. Now we also have special set of video lectures which are specially prepared to suit the need for the board students. The Lectures Covers in full depth, the description of all the involved concepts. Studying through lectures largely reduces the need of individual tuition. Lectures can be use at a pace which suits us. Students can pause and rewind the lectures according to their need. Complete practice tests and solutions of every topic would also be provided. Website: http://www.vijayadarsh.com Join us on Facebook: https://www.facebook.com/VijayAdarshIndia E-mail : [email protected] : [email protected] Contact: +91 9268373738 (Buy Now Video Lectures)
Views: 39432 StayLearning
Variable Costing Example
 
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This video provides an example of how to calculate a company's operating profit or loss when Variable Costing is used in Managerial Accounting. To calculate operating profit or less with Variable Costing, you subtract operating expenses from operating revenues. However, fixed manufacturing overhead is treated as a period cost and is expensed immediately. This is a key distinction from Absorption Costing; under Absorption Costing, fixed manufacturing overhead is treated as a product cost and thus becomes attached to inventory. Edspira is your source for business and financial education. To view the entire video library for free, visit http://www.Edspira.com To like Edspira on Facebook, visit https://www.facebook.com/Edspira To sign up for the newsletter, visit http://Edspira.com/register-for-newsletter Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. The goal of Michael's life is to increase access to education so all people can achieve their dreams. To learn more about Michael's story, visit http://www.MichaelMcLaughlin.com To follow Michael on Twitter, visit https://twitter.com/Prof_McLaughlin To follow Michael on Facebook, visit https://www.facebook.com/Prof.Michael.McLaughlin
Views: 249 Edspira
Direct Cost Vs Indirect Cost | Managerial Accounting | CMA Exam | Ch 2 P 1
 
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Direct Cost A direct cost is a cost that can be easily and conveniently traced to a specified cost object. Indirect Cost An indirect cost is a cost that cannot be easily and conveniently traced to a specified cost object. For example, a Campbell Soup factory may produce dozens of varieties of canned soups. A common cost is a cost that is incurred to support a number of cost objects but cannot be traced to them individually. A common cost is a type of indirect cost. A particular cost may be direct or indirect, depending on the cost object. Direct Labor Direct labor consists of labor costs that can be easily (i.e., physically and conveniently) traced to individual units of product. Direct labor is sometimes called touch labor because direct labor workers typically touch the product while it is being made. Labor costs that cannot be physically traced to particular products, or that can be traced only at great cost and inconvenience, are termed indirect labor. Just like indirect materials, indirect labor is treated as part of manufacturing overhead. Indirect labor includes the labor costs of janitors, supervisors, materials handlers, and night security guards. Although the efforts of these workers are essential, it would be either impractical or impossible to accurately trace their costs to specific units of product. Hence, such labor costs are treated as indirect labor. Manufacturing Overhead Manufacturing overhead, the third manufacturing cost category, includes all manufacturing costs except direct materials and direct labor. Manufacturing overhead includes items such as indirect materials; indirect labor; maintenance and repairs on production equipment; and heat and light, property taxes, depreciation, and insurance on manufacturing facilities. A company also incurs costs for heat and light, property taxes, insurance, depreciation, and so forth, associated with its selling and administrative functions, but these costs are not included as part of manufacturing overhead. Only those costs associated with operating the factory are included in manufacturing overhead. Various names are used for manufacturing overhead, such as indirect manufacturing cost, factory overhead, and factory burden. All of these terms are synonyms for manufacturing overhead. Nonmanufacturing Costs Nonmanufacturing costs are often divided into two categories: (1) selling costs and (2) administrative costs. Selling costs include all costs that are incurred to secure customer orders and get the finished product to the customer. These costs are sometimes called order-getting and order-filling costs. Examples of selling costs include advertising, shipping, sales travel, sales commissions, sales salaries, and costs of finished goods warehouses. Selling costs can be either direct or indirect costs. For example, the cost of an advertising campaign dedicated to one specific product is a direct cost of that product, whereas the salary of a marketing manager who oversees numerous products is an indirect cost with respect to individual products. Administrative costs include all costs associated with the general management of an organization rather than with manufacturing or selling. Examples of administrative costs include executive compensation, general accounting, secretarial, public relations, and similar costs involved in the overall, general administration of the organization as a whole. Administrative costs can be either direct or indirect costs. For example, the salary of an accounting manager in charge of accounts receivable collections in the East region is a direct cost of that region, whereas the salary of a chief financial officer who oversees all of a company’s regions is an indirect cost with respect to individual regions. Nonmanufacturing costs are also often called selling, general, and administrative (SG&A) costs or just selling and administrative costs. Direct cost, indirect cost, common cost, manufacturing overhead cost, indirect material, indirect labor, selling cost, administrative cost, product cost, period costs, prime cost, conversion cost, variable cost, fixed cost, committed fixed cost, discretionary fixed cost, relevant range, mixed cost, engineering approach, scattergraph, high-low method, traditional format, contribution format income statement, differential cost, differential revenue, opportunity cost.sunk cost, relevant cost.
Variable versus Absorption Costing
 
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Variable costing versus absorption costing Variable costing income statement Absorption costing income statement Examples
Accounting: Product Costs
 
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Copyright by Brian R. Lazarus. 2011. Check out this website: http://www.lazarusbusinesssolutions.com for other related video lectures.
Views: 9206 profblazarus
Job Order Costing Explained | Managerial Accounting | CMA Exam | Ch 3 P 1
 
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Under absorption costing, product costs include all manufacturing costs. Some manufacturing costs, such as direct materials, can be directly traced to particular products. For example, the cost of the airbags installed in a Toyota Camry can be easily traced to that particular auto. But what about manufacturing costs like factory rent? Such costs do not change from month to month, whereas the number and variety of products made in the factory may vary dramatically from one month to the next. Because these costs remain unchanged from month to month regardless of what products are made, they are clearly not caused by—and cannot be directly traced to—any particular product. Therefore, these types of costs are assigned to products and services by averaging across time and across products. The type of production process influences how this averaging is done. Job-order costing is used in situations where many different products, each with individual and unique features, are produced each period. For example, a Levi Strauss clothing factory would typically make many different types of jeans for both men and women during a month. This is a custom product that is being made for the first time, but if this were one of the company’s standard products, it would have an established bill of materials. A bill of materials is a document that lists the type and quantity of each type of direct material needed to complete a unit of product. The materials requisition form is a document that specifies the type and quantity of materials to be drawn from the storeroom and identifies the job that will be charged for the cost of the materials. The form is used to control the flow of materials into production and also for making entries in the accounting records. A job cost sheet records the materials, labor, and manufacturing overhead costs charged to that job. Measuring Direct Labor Cost Direct labor consists of labor charges that can be easily traced to a particular job. Labor charges that cannot be easily traced directly to any job are treated as part of manufacturing overhead. As discussed in a previous chapter, this latter category of labor costs is called indirect labor and includes tasks such as maintenance, supervision, and cleanup. Today many companies rely on computerized systems (rather than paper and pencil) to maintain employee time tickets. A completed time ticket is an hour-by-hour summary of the employee’s activities throughout the day. One computerized approach to creating time tickets uses bar codes to capture data. Computing Predetermined Overhead Rates. There are three reasons for this: Manufacturing overhead is an indirect cost. This means that it is either impossible or difficult to trace these costs to a particular product or job. Manufacturing overhead consists of many different types of cost ranging from the grease used in machines to the annual salary of the production manager. Some of these costs are variable overhead costs because they vary in direct proportion to changes in the level of production (e.g., indirect materials, supplies, and power) and some are fixed overhead costs because they remain constant as the level of production fluctuates (e.g., heat and light, property taxes, and insurance).Page 123 Because of the fixed costs in manufacturing overhead, total manufacturing overhead costs tend to remain relatively constant from one period to the next even though the number of units produced can fluctuate widely. Consequently, the average cost per unit will vary from one period to the next. An allocation base is a measure such as direct labor-hours (DLH) or machine-hours (MH) that is used to assign overhead costs to products and services. The most widely used allocation bases in manufacturing are direct labor-hours, direct labor cost, machine-hours and (where a company has only a single product) units of product. Job order costing, Direct cost, indirect cost, common cost, manufacturing overhead cost, indirect material, job cost sheet, job number, subsidiary ledger, material requisition form, bill of materials, time ticket, allocation base predetermined overhead rate, cost driver, fixed overhead, variable overhead Raw materials, work in process, finished goods, cost of goods manufactured, manufactured overhead cost Cost of goods manufactured Underapplied, overapplied
76.  Managerial Accounting Ch8 Ex Pt1: Variable and Absorption Costing
 
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Exercises: 8-1: Variable and Absorption Costing Unit Product Costs 8-2: Variable Costing Income Statement; Explanation of Difference in Operating Income Text Used Managerial Accounting Tenth edition Garrison et al. Publisher: McGrawHill
Views: 1598 Mark Meldrum
Variable Cost, Fixed Cost and Mixed Cost | Managerial Accounting | CMA Exam | Ch 2 P 3
 
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Variable Cost A variable cost varies, in total, in direct proportion to changes in the level of activity. Common examples of variable costs include cost of goods sold for a merchandising company, direct materials, direct labor, variable elements of manufacturing overhead, such as indirect materials, supplies, and power, and variable elements of selling and administrative expenses, such as commissions and shipping costs.2 For a cost to be variable, it must be variable with respect to something. That “something” is its activity base. An activity base is a measure of whatever causes the incurrence of a variable cost. An activity base is sometimes referred to as a cost driver. Some of the most common activity bases are direct labor-hours, machine-hours, units produced, and units sold. Other examples of activity bases (cost drivers) include the number of miles driven by salespersons, the number of pounds of laundry cleaned by a hotel, the number of calls handled by technical support staff at a software company, and the number of beds occupied in a hospital. While there are many activity bases within organizations, throughout this textbook, unless stated otherwise, you should assume that the activity base under consideration is the total volume of goods and services provided by the organization. We will specify the activity base only when it is something other than total output. variable cost, fixed cost, committed fixed cost, discretionary fixed cost, relevant range, mixed cost, engineering approach, scattergraph, high-low method, traditional format, contribution format income statement, Direct cost, indirect cost, common cost, manufacturing overhead cost, indirect material, indirect labor, selling cost, administrative cost, product cost, period costs, prime cost, conversion cost. Fixed Cost A fixed cost is a cost that remains constant, in total, regardless of changes in the level of activity. Examples of fixed costs include straight-line depreciation, insurance, property taxes, rent, supervisory salaries, administrative salaries, and advertising. Unlike variable costs, fixed costs are not affected by changes in activity. Consequently, as the activity level rises and falls, total fixed costs remain constant unless influenced by some outside force, such as a landlord increasing your monthly rental expense. The Linearity Assumption and the Relevant Range Management accountants ordinarily assume that costs are strictly linear; that is, the relation between cost on the one hand and activity on the other can be represented by a straight line. Economists point out that many costs are actually curvilinear; that is, the relation between cost and activity is a curve. Nevertheless, even if a cost is not strictly linear, it can be approximated within a narrow band of activity known as the relevant range by a straight line. The relevant range is the range of activity within which the assumption that cost behavior is strictly linear is reasonably valid. Mixed Costs A mixed cost contains both variable and fixed cost elements. Mixed costs are also known as semivariable costs. Managers can use a variety of methods to estimate the fixed and variable components of a mixed cost such as account analysis, the engineering approach, the high-low method, and least-squares regression analysis. In account analysis, an account is classified as either variable or fixed based on the analyst’s prior knowledge of how the cost in the account behaves. For example, direct materials would be classified as variable and a building lease cost would be classified as fixed because of the nature of those costs. The engineering approach to cost analysis involves a detailed analysis of what cost behavior should be, based on an industrial engineer’s evaluation of the production methods to be used, the materials specifications, labor requirements, equipment usage, production efficiency, power consumption, and so on. The first step in applying the high-low method or the least-squares regression method is to diagnose cost behavior with a scattergraph plot.Two things should be noted about this scattergraph: The total maintenance cost, Y, is plotted on the vertical axis. Cost is known as the dependent variable because the amount of cost incurred during a period depends on the level of activity for the period. (That is, as the level of activity increases, total cost will also ordinarily increase.) The activity, X (patient-days in this case), is plotted on the horizontal axis. Activity is known as the independent variable because it causes variations in the cost. From the scattergraph plot, it is evident that maintenance costs do increase with the number of patient-days in an approximately linear fashion. In other words, the points lie more or less along a straight line that slopes upward and to the right. Cost behavior is considered linear whenever a straight line is a reasonable approximation for the relation between cost and activity.
Intro to Managerial Accounting: Inventory Costing [Variable & Absorption Methods] (Chapter 9)
 
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Introduction to Managerial Accounting Professor Savita Sahay Please visit our website at http://raw.rutgers.edu TIME STAMPS Inventory Costing Example: 0:46 Inventory Costing (Overview): 3:07 Absorption and Variable Costing: 5:13 Methods for Cost Separation: 6:17 Practice Problem: 8:30 --- Cost of ending inventory (under variable & absorption costing) --- Cost of goods sold (under variable costing) Practice Problem: 10:23 --- Cost per unit under absorption and variable costing --- Ending inventories under absorption and variable costing --- Operating income under both absorption and variable costing Income Comparison: 12:38 Simple Rules: 14:17 Three year income comparison: 15:40 Practice Problem: 17:16 --- Difference in income under absorption and variable costing methods Production Volume Variance: 18:35 Practice Problem: 19:54 Practice Problem: 22:26 --- Theoretical fixed manufacturing overhead rate (per unit) --- Practical fixed manufacturing overhead rate (per unit) --- Normal fixed manufacturing overhead rate (per unit) --- Master-budget fixed manufacturing overhead rate (per unit) There are three choices available for inventory costing - absorption costing (includes all manufacturing costs), variable costing (includes only variable manufacturing costs), and throughput costing (includes only direct material variable manufacturing costs). All the methods exclude all nonmanufacturing costs, whether fixed or variable. If production is different from sales, the income under the three methods will be different due to fixed costs. Several rules to take into account: RULE 1: (1) If production is greater than sales, income under absorption costing is greater than income under variable costing. (2) If production is equal to sales, income under absorption costing is equal to income under variable costing. (3) If production is less than sales, income under absorption costing is less than income under variable costing. RULE 2: The difference in income can be calculated by subtracting sales from production and then multiplying the difference by fixed manufacturing overhead cost. This can be denoted as: (P - S) x FMOH per unit There are three populat costing systems: (1) actual costing [which can be found by multiplying the actual quantity times the actual price], (2) standard costing [which can be found by multiplying standard quantity times standard price], and (3) normal costing [which can be found by multiplying actual quantity by standard price]. Absorption or variable costing can be combined with each one to give companies six different alternatives to choose from. If a company uses normal costing, which is very popular and is recommended by the IRS (internal revenue service), it will use a budgeted FMOH (fixed manufacturing overhead) rate to apply fixed costs to production. This may lead to production volume variance. NOTE that the dangers involved / associated with choosing a capacity level include making incorrect pricing decisions (leading to downward demand spiral) as well as planned unused capacity. To receive additional updates regarding our library please subscribe to our mailing list using the following link: http://rbx.business.rutgers.edu/subscribe.html
Views: 14895 Rutgers Accounting Web
Joint Product Costs and the Splitoff Point
 
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This video introduces the concept of joint costs and the splitoff point in managerial accounting. Joint products refer to two or more products that are produced from the same input. The point at which the raw product is transformed into multiple joint products is known as the splitoff point. (Note: a product with a relatively low sales value may be referred to as a by-product rather than a joint product) Costs incurred prior to the splitoff point are known as joint costs. Joint costs are commonly allocated to the individual joint products (using the relative sales method, physical unit method, or Net Realizeable Value method) for purposes of computing Cost of Goods Sold. However, joint costs are not relevant when deciding what to do with a product after the splitoff point has been reached (for example, in a sell-or-process further decision). After the splitoff point has been reached, joint costs have already been incurred-- thus, managers should only consider the incremental costs and revenues. Edspira is your source for business and financial education. To view the entire video library for free, visit http://www.Edspira.com To like us on Facebook, visit https://www.facebook.com/Edspira Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. The goal of Michael's life is to increase access to education so all people can achieve their dreams. To learn more about Michael's story, visit http://www.MichaelMcLaughlin.com To follow Michael on Facebook, visit https://facebook.com/Prof.Michael.McLaughlin To follow Michael on Twitter, visit https://twitter.com/Prof_McLaughlin
Views: 37703 Edspira
Product Cost Vs Period Cost | Managerial Accounting | CMA Exam | Ch 2 P 2
 
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Product Costs For financial accounting purposes, product costs include all costs involved in acquiring or making a product. In the case of manufactured goods, these costs consist of direct materials, direct labor, and manufacturing overhead.1 Product costs “attach” to units of product as the goods are purchased or manufactured, and they remain attached as the goods go into inventory awaiting sale. Product costs are initially assigned to an inventory account on the balance sheet. When the goods are sold, the costs are released from inventory as expenses (typically called cost of goods sold) and matched against sales revenue on the income statement. Because product costs are initially assigned to inventories, they are also known as inventoriable costs. We want to emphasize that product costs are not necessarily recorded as expenses on the income statement in the period in which they are incurred. Rather, as explained above, they are recorded as expenses in the period in which the related products are sold. Period Costs Period costs are all the costs that are not product costs. All selling and administrative expenses are treated as period costs. For example, sales commissions, advertising, executive salaries, public relations, and the rental costs of administrative offices are all period costs. Period costs are not included as part of the cost of either purchased or manufactured goods; instead, period costs are expensed on the income statement in the period in which they are incurred using the usual rules of accrual accounting. Keep in mind that the period in which a cost is incurred is not necessarily the period in which cash changes hands. For example, as discussed earlier, the costs of liability insurance are spread across the periods that benefit from the insurance—regardless of the period in which the insurance premium is paid. Page 28 Prime Cost and Conversion Cost Two more cost categories are often used in discussions of manufacturing costs—prime cost and conversion cost. Prime cost is the sum of direct materials cost and direct labor cost. Conversion cost is the sum of direct labor cost and manufacturing overhead cost. The term conversion cost is used to describe direct labor and manufacturing overhead because these costs are incurred to convert materials into the finished product. product cost, period costs, prime cost, conversion cost, variable cost, fixed cost, committed fixed cost, discretionary fixed cost, relevant range, mixed cost, engineering approach, scattergraph, high-low method, traditional format, contribution format, Direct cost, indirect cost, common cost, manufacturing overhead cost, indirect material, indirect labor, selling cost, administrative cost, cpa exam. Manufacturing Overhead Manufacturing overhead, the third manufacturing cost category, includes all manufacturing costs except direct materials and direct labor. Manufacturing overhead includes items such as indirect materials; indirect labor; maintenance and repairs on production equipment; and heat and light, property taxes, depreciation, and insurance on manufacturing facilities. A company also incurs costs for heat and light, property taxes, insurance, depreciation, and so forth, associated with its selling and administrative functions, but these costs are not included as part of manufacturing overhead. Only those costs associated with operating the factory are included in manufacturing overhead. Various names are used for manufacturing overhead, such as indirect manufacturing cost, factory overhead, and factory burden. All of these terms are synonyms for manufacturing overhead. Nonmanufacturing Costs Nonmanufacturing costs are often divided into two categories: (1) selling costs and (2) administrative costs. Selling costs include all costs that are incurred to secure customer orders and get the finished product to the customer. These costs are sometimes called order-getting and order-filling costs. Examples of selling costs include advertising, shipping, sales travel, sales commissions, sales salaries, and costs of finished goods warehouses. Selling costs can be either direct or indirect costs. For example, the cost of an advertising campaign dedicated to one specific product is a direct cost of that product, whereas the salary of a marketing manager who oversees numerous products is an indirect cost with respect to individual products. Administrative costs include all costs associated with the general management of an organization rather than with manufacturing or selling. Examples of administrative costs include executive compensation, general accounting, secretarial, public relations, and similar costs involved in the overall, general administration of the organization as a whole. Administrative costs can be either direct or indirect costs.
Manufacturing Costs (Direct Fixed & Variable, Indirect Fixed & Variable, Whats Included In Each)
 
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Manufacturing Variable & Fixed costs understanding what is included for (1) Direct manufacturing costs for both Fixed & Variable costs & (2) Indirect manufacturing (overhead) for both Fixed & Variable Indirect costs, explaining traceable variable & fixed costs for direct manufacturing costs from the prospective of individual product being processed & overall costs from supporting departments, looking at assigning costs to the product (direct & indirect costs) & cost behavior as (fixed & variable costs)
Views: 4038 Allen Mursau
Joint Cost | Managerial Accounting | CMA Exam
 
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Joint cost, relative sale value method, absorption costing, fixed manufacturing overhead, variable costing, fixed cost, variable cost, segmented income statement, common cost, traceable cost,
What is a Product Cost vs. Period Cost?
 
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WANNA MASTER MANAGERIAL ACCOUNTING? CLAIM YOUR 50% OFF COUPON BELOW! https://www.udemy.com/managerial-accounting-the-ultimate-beginner-course/?couponCode=50_OFFM Hey Students! In this video today, we use an easy example of a car factory to show you how Product Costs and Period Costs work in Managerial Accounting. See how we calculate product costs and how materials, labor and overhead work. Product Costs are what make up a product. What about the other costs such as Period Costs? Learn more about selling and admin costs. Find out how in this engaging video. Take a look! ******************************************************************** Wanna Master Managerial Accounting? Claim your 50% Off Coupon Now! Managerial Accounting - The Ultimate Beginner Course: https://www.udemy.com/managerial-accounting-the-ultimate-beginner-course/?couponCode=50_OFFM ******************************************************************** SUBSCRIBE SO YOU CAN MASTER ACCOUNTING! https://www.youtube.com/channel/UCCyBG-qtLqfvCdSG34ES8Ag WANT TO LEARN MORE? CONNECT WITH ME BELOW: ******************************************************************** FACEBOOK: https://www.facebook.com/accountinguniversity?ref=hl GOOGLE+ https://plus.google.com/u/0/b/118255991627414878635/+Accountinguniv/posts WEBSITE http://accountinguniv.com/ ******************************************************************** Comment Below if you have any questions!
Views: 7996 Accounting University
What Is The Difference Between Variable And Absorption Costing?
 
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In the field of accounting, variable (direct) costing and absorption (full) costing are two different methods of applying production costs to products or services. The difference between the two methods is in the treatment of fixed manufacturing overhead costs. Variable and absorption costing accountingverse. How unit product cost is computed under two methods? Variable and absorption are different costing methods. When absorption costing method is used a portion of fixed manufacturing overhead cost allocated to each unit product along with variable income comparison and syste. Variable the explanation for this difference needs two separate income (c) those who use direct costing figures must understand between conventional apr 9, 2013 of most common cost accounting methods determining finished goods are variable and absorption under costing, all production costs (direct labor, materials, factory overhead whether fixed or variable) considered products. Comparing absorption and variable costing. Particularly aug 10, 2015 the underlying rationale of this approach is that in order to make predictions about costs, you must separate them based on behavior fixed or variable. You must learn the implications of each before dec 4, 2014 main difference between two methods is treatment fixed manufacturing overheads in absorption costing or full are a part product cost whereas variable does not support cvp analysis because it essentially treats overhead as by g y assigning per unit amount to productiontreating can lead faulty pricing decisions and keep sep 29, 2016 basis i. Because absorption costing includes all costs of production as product costs, it is frequently referred to full method. Absorption costing provides a more accurate accounting of net profitability, especially when company doesn't sell all its products in the same period they are manufactured explain difference between variable and absorption. Jul 22, 2013 in the field of accounting, variable (direct) costing and absorption (full) are two different methods applying production costs to products or services. Regarding selling and administrative expenses, the answer to primary difference between variable absorption costing is treatment of; Fixed cos describe basic methods how that treated two methodsmain method of fixed manufacturing view full. Googleusercontent search. When production is equal to sales, meaning there no difference in the beginning and ending inventories, operating income under both methods are sameAbsorption vs variable costing strategic cfo. Variable the difference between absorption costing and variable is vsabsorption vs slideshare. What are the differences between absorption costing and variable versus accounting for vsvariable principlesofaccounting. What is the difference between two costing methods? Read this article for details dec 4, 2014 knowledge about absorption and variable a must to do product. Advantages & disadvantages of using absorption vs. As its name sugge
Views: 62 Vance Medlen Tipz
What Is Cost Absorption?
 
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Googleusercontent search. Absorption costing? costing accountingtoolsaccountingcoach. Absorption costing definition, formula & example video lesson. Absorption costing is also called full as all costs may 4, 2017 absorption definition. Absorption costing is defined as a method for accumulating the costs associated with production process and absorption means that all of manufacturing are absorbed by units produced. Cost allocation cost means the allotment of proportions to centers or nov 21, 2014 one reason is that calculating absorbed costs part a broader method in accounting called absorption costing, which (when done correctly) explain difference between variable and costing. Remember, total the traditional income statement uses absorption costing to create. Accountingcoach absorption costing investopedia terms a absorptioncosting. What is absorption costing? Definition costing vscost allocation & cost absorption, homework assignment help. It was at that time jack learned he should consider applying absorption. What are absorbed costs? Kashoo. How unit product cost is computed under two methods? Variable and absorption are may 23, 2013. Absorption costing or full system variable, direct absorption cost accounting the strategic cfo. Variable costing versus absorption accounting for costs and techniques learn youtube. Absorption costing is a managerial accounting cost method of expensing all costs associated with manufacturing particular product and required for generally accepted principles (gaap) external reporting. Asp url? Q webcache. Absorption vs variable costing the strategic cfototal absorption wikipedia. Absorption costing is a process of here other costs are negligible or dependent on for this type absorption the material cost should be accounting method valuing inventory. Absorption costing? Absorption costing accountingtoolsaccountingcoach. The cost of a unit product under absorption costing method consists direct materials, labor and both variable fixed overhead jul 22, 2013 accounting (also known as the plus approach), is that centered upon allocation manufacturing to in field accounting, (direct) (full) are two different methods applying production costs focus this class on how allocate productoverhead. It is the practice of charging all costs both variable and fixed to absorbed full are two separate financial metrics utilized by businesses cost, also commonly known as absorption a method for under costing, companies treat manufacturing costs, including product. In other words, the cost of a finished unit in inventory will include direct materials, labor, and both variable fixed manufacturing overhead absorption costing is system which treats all costs production as product costs, regardless weather they are or. This income statement looks at costs by dividing into product and this meant that jack was not even covering his with each coffee pot sold. Absorption costing absorbs all the costs of manufacturing a product including b
Views: 35 Bet My Bet
Introduction to Cost Behavior - Fixed, Mixed and Variable Costs
 
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This video defines various types of cost behavior like fixed, mixed, variable, committed, and discretionary costs.
Variable Costs and Fixed Costs (Part 1 of 2)
 
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This video is Part 1 of a simple, qualitative explanation of how expenses are categorized as variable or fixed.
Views: 56215 The Accounting Tutor
Activity Based Costing Examples - Managerial Accounting video
 
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Activity Based Costing Example - Accounting video by TheAccountingDr is a tutorial video with examples on using an activity-based costing system: 1) calculate the allocation rate and 2) allocated costs (overhead/indirect costs) using the allocation rate. In addition, we calculate the indirect costs per unit of planned products as well as the product costs per unit of planned products (direct materials + direct labor + OH). Managerial Accounting lecture notes: http://tiny.cc/nw1enw Activity-Based Costing terminology review game: http://tiny.cc/mxgoow -- Thank you all for your wonderful support. Because of your support we have been able to reach and help numerous accounting students. Please continue to be a part of our mission to help other accounting students be successful by giving our videos thumbs up, giving comments and adding our videos to your favorites. Subscribe: http://www.youtube.com/subscription_center?add_user=routhwsuedu Friend me on Facebook and post your questions: http://www.facebook.com/TheAccountingDoctor -- For more accounting/how to eLectures (and accompanying lecture notes) similar to Activity-Based Costing Examples - Managerial Accounting video, blog, FAQs and accounting eBooks visit http://www.TheAccountingDr.com. Activity-Based Costing Examples - Managerial Accounting video: http://youtu.be/7SNjEHIYjns -- Please note that videos may require Flash media and may not play on devices without Flash capabilities (i.e. iPad). If you are having difficulty viewing this video on YouTube, these videos may also be viewed without Flash on my website at http://www.TheAccountingDr.com.
Disadvantages of Variable Costing
 
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This video highlights several disadvantages of using Variable Costing. Variable Costing is not considered GAAP. A company that decides to use Variable Costing must continue using Absorption Costing to prepare financial statements for external users such as investors and creditors. Thus, a company that uses Variable Costing must maintain two separate cost systems: Absorption Costing for external reporting purposes, and Variable Costing for internal decision-making purposes. The additional time and cost of maintaining two cost systems may deter some executives from adopting Variable Costing. A company that implements Variable Costing will also need to spend time educating its employees about the new cost system. This is particularly important because, under Variable Costing, the company's per-unit product cost will decrease. This is because Variable Costing does not include fixed manufacturing overhead as a product cost, but instead treats it as a product cost. If the company's sales staff members are not aware of this, they may simply observe that the per-unit product cost is lower and assume that this means the company is producing the product more cheaply. They may then decide to lower the price, which would be counterproductive since the company's costs have not in fact changed (fixed manufacturing overhead is just being classified differently). Edspira is your source for business and financial education. To view the entire video library for free, visit http://www.Edspira.com To like Edspira on Facebook, visit https://www.facebook.com/Edspira To sign up for the newsletter, visit http://Edspira.com/register-for-newsletter Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. The goal of Michael's life is to increase access to education so all people can achieve their dreams. To learn more about Michael's story, visit http://www.MichaelMcLaughlin.com To follow Michael on Twitter, visit https://twitter.com/Prof_McLaughlin To follow Michael on Facebook, visit https://www.facebook.com/Prof.Michael.McLaughlin
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