pre @utek Stuay.| ESE ACCOUNTING BASICS CoNertae Meroe es ‘An opnization stands spat om ther organizations ‘Concern Concept J. Time Period Concept + Aesounting evode must be ase onthe most bible Cost Principe “ *Asetteree su ae ron sca ot 1. Enaishs when oon eve, ul when "The Accounting Period " + mast ers toc nis 1. pact of evens eerie as they occur hor dat ofthe yar spd oreo cepa , Stale Monetary Unt Bia eee nT ASSETS-LIABILITIES‘OWNERS' EQUITY 1. Accounts Payable Ora or mpd promise op db rel of eaing a promissory note for gods or serves. Jc. Owners Equity: Clams ek by ERs De) ASSETS LIABILITIES S OWNERS EQUITY “DEBIT CREDIT Siete ieee aie Sues. metas RUNS Accounts Pasa Sipps purchased supple ~ Asset 150065 Liability T0065 Accounts Payable FINANCIAL STATEMENTS - ro eke UROL ERs COMPANY BALANCES December 3, 20s, Cal Acenunts vse. ‘Allowance for onal esos, Notes eet Mercandie imc Pri insrance SRT i300 100 47.200 00 8000 ‘3000 sirzawo Long-Term asses Pant and Eaupneat Land Baia “Accu dae otal longterm asics TOTAL ASSETS carrot (abies: ‘Aecouns payable. oves vale Salis poable Uncarnc r 00 Tal curren bit S Long-term Habis: ‘Nove payable TOTAL LIABILITIES, - STOCKHOLDERS" FQU Coma sock, STORIE (0.000 authorized dis) Pain exces ofr. so0.000 ii.00 ‘S00 sa00 ssi0 ssa sum ‘Spo 44000 2000, 30000 $ion.000 ‘eos 12.080 emo “Total pain capital FTOTAL STOCKHOLDERS? equrry {STOCKHOLDERS FOUITY Gane ee A. Sioa of ching ini xing ing sip I. Adinetincome orsubeaet ess. Ent with nev retained earings al spas ACCOUNTING 1 ‘COMPANY INCOME STATEMENT Sate SMT Sales ets and allowances 9500 cel $500 14,000 Neale. 8000 Cost of gods sol: ‘Begining ventory 3a. 208, sss.00 Purchases, “90,000 Les Purchase eur andallovanes .. 8.800 Parcase discounts 4900 13,700 Net Parse sin6300 ‘Adi: Tansporaton in 8300 (Cos of merchandise parcased.. 485600 Merchandie ail forsale... 538.600 ‘ess ending nsentry Dee. 31, 2x ss Cos of merchandise sold ses.eon JGROSS PROFIT ON SALES 104.00 persing Expense: Song Expenses Sales salaries expense. $39,100 ‘Advertsing expense ad debt expense Depeeciaton expense delivery ck 00 Misolncous expenses 200 “Tot sling expenses. $2300 Adminisraive expenses Orc alates expense... $13 000 Rem expen 10,000 ‘Depecaton expose” Building 00 Insurance expense 1900 Otc supplies expense “0 Misetneous expenses 1 ‘Toa ami, expenses 26320 “Total operating expenses seaezo racome fom operat 35,780 Other Icom Inresisoms on Restle 10000 10500 Ore expenses ners expen ‘0300 NET INCOME i598 ergs imber of saree sting, 10,000 Eamiogs peshare SUD Poe Maan GN en For Yeu End Decent 3 Les vied a. Increase in Rone ermine 45.010 Retnined earnings December 3,200. $42300bdo) let) ORGANIZATIONS OPERATING CYCLE OF A US sto NN Tet a TUS i) A. Reports cash flows from Opera Financing wetivites ‘company g Investing For Year Ended Decenbr ,20x i hems fous forreleo cosets i. ata ara eal business or invita potion Cash To an operating aie 2 When INVOICE i rested ‘sine auch ator and setuntanr ‘Reincone perce samen ES 9ND 2. DEBIT Passer | 2. Sinie nner wih pesona tality ‘Aa Depron “00 Record Neo oy uty dics Parner : ‘Allowan foeSoi Pace Dac = compas Net Parcs, af |. Mote tha oe owner scours Nee en ee aye ald 2 bac omer s parr with peso lly : Dedoce Ince in imcwiocy 300 cerereec ee _ |. Conportons: Le Tncresein prepaid expenses 1 Domest |p." porchase Returos and Allowances { nee e United Ses is i a L a account to purchases (C! lance) Det cet fow m peating aie S20) | 2 Wn mechan ec er ceed dag: Cech fa fom veingsctvies: | | ERT AP & CREDIT Pcie Rete snd Awe, RECORDING a fs Becinseecesnissenntsioos | MNES STON } Naan ienom sigs. yuo] | 1, yyentnes P09 emer resets |, rasan ae fs reed era Can ton fon ence ee pt te tery clon ec | : ‘Cash paid for dividends. | ‘i, BUYER pays shipping cost 1. Record the posting references z a z S90 | Ee a cae 2 RS i ig gue otis boci eset 1 erertiene By Sete eset eres oy a hf fore teeetrn Fe are eer rrcunoracenmn pene] "ied a ete: |e Sater Aap aos i. ournal Entry: DEBIT ~ Cah or scons rcsiabe || 5 Shen etree Se eg |e hawos aa une, Conn] (* Sessa peti Arnie pa A. Procedures: Process which produces financalstatemens| | | i tines + When eonpary reser a rune goo: DEBIT - Salah rans [| 3. Net Sales~ Sales Revenue minus Sales Discounts minus} ete } | Sale Reta and Alomanes rcs les F. Cost of Goods Sold (COGS): Besaing Ivey + ACCOUNTING IN eT ES Nt) Joon an ow jing en | iremory | unset Gontaaie rte Enina)Y . Users of accounting information Mich coenes ed epee pri carved ed inca i. indviuate To manage ban accounts, evalu job 1, Const messrement of pros ome prospects make iments and decison tng eld st andy ccna pdt 2 Businesses To sce sols Salute company prog, Pepe fine stents dcede which bung or quien o purchase Soci a pont ln nes 3, Imenors and Creditor: To desi wheter to start 1 que post aig ral nce. A. erie ‘ow vom calate wnat ncn they expect om thet 1, Prepaid expenses Expire are wed up inne periad | | 3 Nawrcncsae COGS P| Tp. The accountng profesion ms apenes Expenses incre but nat yep |_|“, "pre lane St how en ventory -]°i. Pent necountans emcanstbacatnteecie{ | > Dtataney scons cmt hepa ee snes ; end pec Dearerniaeccrspreate || 5° pai acm : * popu, i. DEBIT - Inc. Sumy for Beg lv, bal. & CREDIT - tn. ].] educational institutions. and powsrame | Priel cant only check on pret cords nthe Bslanes Sot, sho Insets = 2 > 2 o b ° —s co) 4 Oo ‘A Transaction | | # On the Income SitemetSoles Reve - COGS =|] 5) state of Managemen Acoutans (Mia) | Se + EEE ret Anaa §, SHEAR, mmm cy i Hine Uomo eee |S Saitama Bacon trowes] Cee cece 4 Company ¥ bays 200 worhof as spp on cco Ce ec Anti 4 Company ¥ reso 83.00 du om te esomer 5. Compa’ ¥ pays $2,000 ofits accounspaysbe i CORPORATE eae _ASSETS“LIABILITIES-STOCKHOLDER'S EQUITY. = MABILITIES Sy CHARACTERISTICS ‘a 000 SE ast [Separate eat entity iond i. Famed unde state Law fofice sp. 2.000 scours pyab 2: Grams charte from th tat cot [| 3: Siar co an acca! person ‘skcoums esac 4. Ownership neon ar vided in shares of oc. |i: Cox inc aat te ; sash 2090 acount payabl B.Continulty of te: corporations tive regress off | PA , Transactions recordin accounts cad “T acount” | cans ovnesip of Sock tel | Wastes evenae excel ch ecpts DEBIT Cn Shor i, eves acount, [Ne'tmuteal agency: Stockholder cannot corm the] > Mange menue same x Innes sod thei Debi ie) cordate sentactuneedossso haces] | 3, Pah nas eed ax seete CREDIT Co] 1 Bote soon hp se Crd) Sspoffion Shor and Over (her Retene) 2 Laity necoum nse ede on these Cri) |b. Limited abiiy: The masta stockholder ca ‘mount of money heaved Jc, meaty Cash Desens ear on he sd Ds) Je. Separation af ovncritip and nanazent: Tae} | Bion san 2 Onvert Egy somal Soctholders ow the business and clet Dowd off | 3, Keep apeiic amount in fad (imprest system) nse eed on th ight se Cr id) F-| Directors (80D) who appoint coast officer who] 4. Alf hind diuactens se sgyonet by ety oth ket 1 Desens oor on th tse Osh ss) ‘manage the company | [Ess td teu noah abuses oc]SMe ee nosy Geese A, Recelables i. Clams against busineses and individ ST"Notes Recelvable: Promise in wing by deboe B. Uncollectible Accounts (Bad Debt) i. Allwane Method hanson cons Reside) Ii Record cach sollte, DEBIT Cash » fatrmined uncoletble : : Notes Receonble i. More formal than accounts receivable 2, Promise nt ert promi py) 3, Discounting a Not (Sel ote before matty) Rao awa asss i, Plant Assets: angi, land. Budings, equipment 2 Intangible. Assets ‘bentit fom ght tet, Cenyrghs ademas, goodwill 1 Brokerage or Basket Parchave: Alias cost by relief aie POS ue sy A. Natural resources expensed through depletion i. Deplaion expose portion of eatwal reste thai 2, Catal ame sunt of production 3. Record Depiction Expense ad Accused depletion Intangible asactn expensed through amortization 1, Sight over a munimum pod of 0 yeus 2 Amortization is weten of deo agint he asset m3 A. Costing Methods Spee Unit seca oe : 2, Weighted-merapeion of cost oer periods Ending iw and COGS = number of units x weighed E ively on Det 31-250 uni istin Fist-ou (FIFO) 1 Ending im: bse on mos cent cot ost recent phases isn, ies-Out Method Endgames Fal SD 7 Tastin, Frst-out(L menory compos of lds cost “ha Fete Feb Gcostsaplicdsnn. 150 unis at 12- L800 ning mentor. 250 unis at S200 $2 800280= $11.00 pera [5 COWER-OF-COST-OR-MARKETRULE (CCM i. Accounting conservatism, report a act a he loner of Hone cot ore mah ae > moa eplaemea cost hes in partes DEPRECIATION 2 Deprctaton Expense for fsiod is amount of et Coa that so ES ean ceed up oer ie of ast ” examperTne cost oft depreial sc i 000. “The estimated savage sale $50, i. El amount of depreciation cach oar 2 Cat Resta Valuosfl ie nye Example “ S050 JC: Units of Production Method i, Ament dpesiaton depeads on uns of ouput 2, Com Savage Value, Estate? ours Saf sa = ss HOURLY DeRRECIATION |b. Double Dectinng Balance 2 DDB Raper yar (Uefa years) x2 = (Only method ta ignores res value Rea Bia Te fyi Cost Depees Atieu Rate ForThs Value of AtBeg. OFvcar ‘Yor aE Tsao 1 ae Sa a a Ta) san — 3 880_— 16 she“ 196 a 1396 Ie B. Sumot-vears Digs (SYD) “ccleratd, ago begin Sip Sm of yeas digs ~ NONS1)2, Neuse i Step 2. Numerator ~ last year of lif, count backwards aye Step 3. Denominator = Sum of yous digits Sten Cost Residal Vue x tp 2Step 3) average Cost Method eight eerage cost method) PXAMPLE nico Wey Con Dae ASSURE BOGE VET ' 240001800 = $1333 por nit Salvage forThis Deps. at En 2Sountex S133 = S835 vale New alia shir hae 1 Rese TO aa s=sroun| [sem are Ls S47 Feb. 6 Pareases.nnnc SOD ani at 12 00a soo — 70 May 9 Purcases. 200 unisat_ 13 3 Ssn0 ows 00 — eon Vay 3 Pacaases 500 aniteat 13 = 3 or S sr Sep 11 Parcanes. S00 ante st 14> 7000 Sot oS Jox. 18 Pures io waiwat 1S = 1300 [Nox 7- Purchases 3m) one st 16 F. MACRS DEPRECIATION RATE SCHEDULE. [Retire reste esas 1400 mrs S200] | Spear Cis Depecaion "© Year Choe Depectation LIABILITIES OTe RR Usage ay Cites) Evans Puyol x employee compensation Pyrat dedetions ® Sour, 60a ine S87,000 (3005 fmt) & 14S DEBIT Salary Expense 2s) ‘CREDIE Emplye Ino Tax Pyle (mts wis) CREDIT FCAT Pyabe (7.65) CREDIT Sar Payable to Employees (at) Torecord employers paral nes CCREDIF Sate Uncrpiorneat Tax Payable CGREDIE Federal Unemployment Tax Payable 3 Toor ange beneite DEBIT: Life lasurance Expense Peson Expense Tmployee Benois Prat c fer Spec paral jour ID. ek acceuat Spell cert which osu the PCs A Curren ables du nome year o es i. Trade Accounts Fajale: Repesct amounts oved to 2, Short-erm Notes Payable: Notes Pate de wit one ye 4. Discounted Note Payable i Borowereches he ae vale of he te eee nest portion of longterm debt i. Poem bi that depends fre evens which‘en mae | DEBIECaypocets) REDE Bont aay ao) i. Anoaton te Dacre Sag Lie) {. Ronds sod as Protest rao bond ec CREDIEfad Poste tty rahe) 1. Astoria sft ren (Sti Lia) CREDIFCak aunty sae xt ae pn) ceeie crn Bonds sly omer iano common sock 1 Capt enchant, coun rie pte of et | | | Lee Liability (PV of fae se payment) Discount on Bonds Payable Amortization bythe Exampe:S10.00 on eS ee 2. armed Capital ' Enury wo trmstr inom othe exuity secon 1. tect to oso: DEE Rewind Earnings & CREDIE Feng Sock Deane © GhebrtPadaceptal excess fpr enum) 1 DEBTEAuFMV) © CREDIE-Paidtcapial in Excess of Par (EMV-Pa) . Asroumted frie the sane shin wing a prefered tock Treasury Stock " 21 Reasons this may occ & Tonal 2! Purchase af Treasury Stock 4, DEBT Sock: CREDIT-Cac hres oustanding . Hetvement af Sock 2 Rogan or ss arses ; 4 Recon inrease i Paidin Capital from Retirement off flimmon sock OF decease roan eunins | common stock sunscrirrioss Fame ]Beowe Copeation recive subsections at $15 per sae subscribers made 50% downpayment on he common sock, le | _ [Premium on Bonds Payable Amortization by the Interest Method Rise Tae Tare Dscoont Ui [a —ouecar i hid (Expense Amor | Bicoust Carving | [S2E_ Ce 50% dows paren ms ne Siossaio" 5) ‘| Fx Exe C= Tass Stoo SRST = eceabe30 oned : Sa00 a7 bas Insts0008 | et | Comme ss Sat i ts 28 {la wok 100500) ss. 000 00g sat ARCSSSO 2000 ]On Augen 14 the co Subseripton price fom al te subscribers. BI Cok 25% dove payne ISTO __ | Example: $10,000 Bond at 6% interest paid due in} | $105*S000* 25) [Rite NT Een sao mem teat nd i neta 3H ee ca SERIO subsp price onal he ster | a Paid Expense Amort. | Premium Carrying | "DiGi Cash (25% down payment ETERS qt | ‘Stosesoioe 35 ‘11250 4 — ato a naa] | lr | ee OWNER’S Setar EE STOCK ec a Pe | | a Capt Stk Pn Capi Ton AGN i. Detected ening 2, CREDIT seine ering appropriate or. Ear OTE > Sette i (or, B Tobe ded ted I, Didend Dates ik DEBI" Retained Faring & CREDIT: Doddends Payable 2° Dae of Recor Athse who ov sock on hs das ai DEBIT; Pale & CREDIT - Cah A Sidends tus Be pad bef corporation pays any vendo common sarees ie 2. Dy dens ne ad are coed toe in ARREARS) (. rrcpating Prefered Sock «Myce dot ae ane pegs |p. Comvere Preered Sk Ga eng ste ls of ck Mit abe: ices he chug ns or 2 Redemplon aac: copton ag © py fy 3 Liquidation Value: Only peered sos, snout cup en gtd costae senin| sick i‘ Moprtena don of corporation’ an sack 2 Remon fr sc dnd 3. Categories of stock dividends i. Resor at FMV at te of dectaraton 3 Desi ties amin PMN ‘on edt se CheDrrcemmen Sep . ‘econ at Parva Draining (Pr ae of te) Den comnon Sock Dste CREDIECom. Si Jc, suo pe iinet 8 munber of shares aor, ised and 2, Stock split ast NO accounts 5 Noort joa cay ged 4 Th ede the pr vale et she SENS Gene 8 CeShvicans cash and cash equivalents € Reveiptof ntestanddnieals “gpa tps tn, sig wages and i, (sewed ais rine ina ais) igang mmo aie tae ss Geapoae Sleund purchase of rear sock aioe ua Haro Cert Sia san-23. isen-10. olrerees oid a7a-ayea20n99-2 iieae0a9-x LL i a les at © glllsa6talootgsllls asst rare: TeeCubek Study, ES Nelo Ute) aU Toni lel tts} [Helps an organization to achleve Hts goals and] abjectives by authering, organizing, ‘communicating information about ts a Main uses Planning. con 2 Eterm paris Making dsisone swt ‘nd noo aed clin inne ste formed ty GAAP, A accounting system uses 3 types of activites 1 Score-keping te acumult ad asi dita 3. Problemsolving to recommend the best course of acti ‘Themes that ule the desig ofall accounting stems 1 Coobenett rer cision making “ Accounting’ position inthe organization Tine sthoriy: Doan ver uberis +3. The enol: Top accounting officer in an onganization, Accountants are expected to adre to standards of ethical cond COST BEHAVIOR Cea Ma Ue "A. Cost drivers: Activites that cause cots to be incurred B, Variable cots vs feed costs 1. ¥change in disetprporton to the xe diver : Cost-aotume profit analysis Cnbuion (CM marin wit~ sale price unit-VC at Bek evn ins = FCICM por anit Bre even in $~ FCICM mito Target profit an be ade o FC mit of cost-aiver activity where Pues stad 8. Cas drivers and cost behavior 1: havior is asunedTinear er sone eet behuviors that combine characterise of buh ined and aisle os behavior a St cot: ihe faa vara, changed abruptly ‘mera of sett Reese the roses ad he tat coi vie ens bs Mixed oa Contain elements of FC & VC JC. Measure cost behavior asa funtion o appropriate function for accuracy and usefulness . Methods of measuring cost functions (Y=F+V) {Cost Fined est (Varsble ont # of Unis) hime been . Chay each acount as a VC oF FC 4 tighow, vnulst_and.lest-squares_ methods: eee ee LL Femina ed EOE eS) IA» Criteria for relevant information 2. Pat dat: Ilene “ 3. Conor even ht remns the same ess fhe alent: leet Speci Sales order 2. Fed cons normally unafsted Deletion or addition of products or departments 2. Uninoiabe costs: Contin (Optima use of inited resources TEmptasizs product with largest taal profi 2.8 of unstimting factor x (CMpont = total CMunt oflimiingfactor{CM ~ Contbton Maria) Role of oss in pring delsions 2, Magia resem: Adi 3 elas: Ei of pie eas ons volun 1 Legal equine: a Predatory ping 4: Costomer demand om enh ott provide a ast profit min i gone by chosing an erative ‘ating cost 1. Regie cash olay Differential = incremental cost | Difference intra ost betwen erates 2: Used in iri anaysis ‘Make-orbuy decisions oc on evant cose int product costs: Occur when two or more cts have reatvly significant sales values Leni spaabe cot beyond spli-of pont en jon eot pir to pico pot & Diferental ans '. Opprnnity cos nay INTRODUCTION TO COST SS A Classifiation of costs "Pe mars ping wef ira Aco cn matin ha mae an Ubi ens can be Heid specifiy nd tcinimoc oo sumot be Melfi with gion a Dircemiteri costs (DM: Cons ofall materials manutd goods ‘Director costs (DL): The wages of alte ber y ACCOUNTING 2 © Paton Types of accounting systems URetsy-based ost accountng a Accutulte retnd cots foreach vty 2. Cant 1. Measure the resources wed ead costs (FO): All costs her a) Parse and rode whe dd in he rcs c. Cost accounting for US and B'S Proce foreland become expenses (CS) when fnvetory i sold '. Two approaches to costs on US Absorption casting: AV and F manufeturing css are ened a prt cost, 1 erst ae proc cost aSaee-VC-Contebution Margin BUDGETING | MASTER BUDGET: OVERALL PLAN MASTER BUDGET: OVERALL PLAN /A. Budgeting overtime 2. Long-range planning For 5-10 ys aplal budget: Planned expeniaes for fies, perating bude: Focus ob 1 adits schedules 1. Fania budget EMocs of operating and capital B, Advantages of budgets A planing ot 2 Maintaining cont by erating actual o budget ic ‘of master budget, ude a Prepare sles budget 6. Pepe prehass bas 41st dbs for purchase 2. nancial budget a Prepare eal cash badget , piticalties All budgets rel [Past pate sed 2 Estimates asa) Blase kon uals 7: fale budget master budget, 1 Perormance report ct 2 Master budget variances 1 Neral formanagomet by xseption B, eibe udget~ vara budget 2 Prepared fora sng fay 4. Fel b arin Fxg aclIsolation of variances and ther causes, 2. ciency measured by eile badgt variance 4. Expected cst Mos iy to be tind 4: Standard cost: Sal be sind Bag! ron ait Feaile budget variances. a Price te wrance: Difference tween el op pre and sandr rie Usage (qui or ficins) variance: Difrene tien quant of apt used and quantity allowed fatal utp 5, Overheadl (01) variances ‘Marble OH efceney arias te OF eng ncaa oo =) ea) A. MCS:an integration of management accounting took |, Ongniztonal pals: in desining MCS (oo) 2.Ompniatonalsub-goals: Means of achieving ‘ganization’ veal goals (idange) ‘Balance of pals, sih-pals, and objective ‘verenphiis on shot fer the deinent of ng range eaten ceveret of ongtiions tsk gol Designing a MCS scree wheter tsb function o dvs) 2. Ldeteaton of responsi centers '. Profit center: Measures revenbe less costs -lvestencner Messe tinea est api Weighing costs and Benefits: Maximum beets at 44 Motiaton of emp ‘Goal congrsnee: Individuals and groups im tf S.Design of internal cota Prove dest cons & imegulres and prea opestinal eicency onioling and easing 6 Developmen of mesures of performance: For bth }C. Control and measurement of financial performance 1.Uncontolale ‘costs Cannot be afeted By ‘management within pea ime span 3. Contbution margin § Contbaton by samen ontallale by responsi] 1 Comtroland measurement of non-financial performance Quality contol Appr Goss woe detessubsandal eve | € ll lu: Com sp reve caress teat 3 oof PUTT eN RSs IN DECENTRALIZED folic Zol NS |B. Transfer pricing Inputs used relation to outputs, win constrain MCS must ft orpnization FOOT Pesos FA Discounted ca flow mode B. Pay-back method: P c p, E. 3. VC based 4 Negrin 5 Use of insets 6 Need for ny transfer piss Performance measures and managens Azoney thee) > performance > rears lessures of profitability 1: Return on eset (ROM) = income /ivestent 2: Residual income = NI- mpd intrest am be defined a ‘Keys to successful management contol systems {Focus on conta 4 2M os I: Net preset vale (XPV) method 1. Teal project apprack: Choos largest NPV 2 Internal ate retura (IRR) method choos IRR] come tes, inflation, mutually icuie projets a I Pry-bck tine = Inia iestment/ Annales ow 2 Doct nt messi profitability ‘Accounting rateatretura (ARR) method: ARR (0 Dyf 1 cease operating i - dee) ina vesen Performance evaluation “axe pln dona ans of peta inom Recovery period Nunes of prods sss are does for tx purposes “Tax shields; deductions protect that amount f| {income from taxation Accelerated depreciation [Wels off sts quicker an sights method 2 Tax avoidance (ining and doting anes) | 4. Double dectinis balnce depreision: (OM off eats ase to be depreciate Depreciation and equipment re Inia verte a Cost fold eset: ct a ah fos ‘con fnew equipment is teleant 2.Do not double count: Equipment neste i ne form of deprecation 3. Relation to oeome ax cash low: lace tx eth lect eleven (Not the bok vale o depen) Galas or loses on dlsposat e Lows prodace tx savings and guns produce tx 2, Gane are ll moe deunle han oes ‘pital budgeting and inflation 1. Nominal rate: Queda sre rte Aftcrtax impact of operating eash inflows Tow x Iota rate) fe _ [8 Assignment of a |B: Purposes [asians costs to at || customer Hottie: 1-300-230-9522 | Isen-2a: 978-ae3z0002-4 k Ispn-t0: y4eze0002-0, A quigkSEUay-gom Savini! Me ‘cist tothe cost objective | Pedition of economic effets of dvisons 2. Toobin dese tation 4 To jsf eos obtain rebar Types i [Allocation of cots to appro uit 3. Allocation of a particular unit prxicts o services J Allocation of oss to final products or services T.allacatepedcton elated coats to their opention, 2, Scene orm tt der inex pracn dart 3 Alloa tal ox accumalted n tpt prs services ing con dtves seid in Sop 2. MO [Assignment of cost to products or services in| proportion to the henefits ceived fom that cost ies Be Cost drivers Peer aaneueng NAA TEaNT) EOS aie een A Variable vs. absorption costing {Accounting for led manufacturing overt ‘2 Narible comtng stn FFO is exced 2. Narkable method 1h Fed FO is expensed as incurred HS spats cos into caepois of fixed and 3. Absorption method a ‘Apply ll variable manufcturing cost plas prof 1.15 spats cot to calories of manufacturing on-manafeting : Fist oveead tae = budgeted xed ‘wcrbeadexpected com ver activity {Production volume. saringe Actual. prodseton sevits fom the expected volume sed Fixed overhend and absorption costs of product, 2 Production-olume variance = applied fied overenddgcted Ted veroad ecto volume 5. Fhed overhead rate depends on expect activity level chee i 4. Actual costing: Acual materials, actual bor, an Normal esting? Actua! ateral, sta! Isbas, an ade te for FO ‘PRICE: US, 95 CAN'S5.05 ems hud en 54616100002! lg