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Learning Guide Unit 2

Site: University of the People

BUS 5110 Managerial Accounting -
Course:
AY2021-T4
Book: Learning Guide Unit 2
Printed by: Haitham Elhassan
Date: Saturday, 5 June 2021, 1:07 PM

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Learning Guide Unit 2 https://my.uopeople.edu/mod/book/tool/print/index.php?id=241113

Description

Learning Guide Unit 2

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Learning Guide Unit 2 https://my.uopeople.edu/mod/book/tool/print/index.php?id=241113

Table of contents

Overview

Introduction

Reading Assignment

Discussion Assignment

Written Assignment

Portfolio Activity

Checklist

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Overview

Unit 2: Costing

Topics:

Direct, Indirect, and Overhead Costs

Fixed, Variable, and Mixed Costs
Job Order Costing
Process Costing
Activity-Based Costing

Learning Objectives:

By the end of this Unit, you will be able to:

1. Explain the main three types of manufacturing costs (direct, indirect, and overhead) and
their cost behaviors (variable, �xed, or mixed).
2. Determine how business costs would be categorized under each cost behavior and type.
3. Describe the three cost methods and the types of businesses that would likely utilize each
method.
4. Compare and contrast di�erent cost methods and recommend an appropriate method for a
company.

Tasks:

Peer assess Unit 1 Assignment

Read through the Learning Guide and the Reading Assignment
Complete the Discussion Assignment by posting in the Discussion Forum
Respond to and rate three of your fellow classmates’ posts in the Discussion Forum
Complete and submit the Case Study/Written Assignment.
Complete the Portfolio Assignment

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Introduction

Commercial companies are in business to make pro�ts for their shareholders. They do this by
selling their products or services for more than it costs to make/provide those products or
services. However, raising prices only works to the point at which consumers are still willing to
purchase the products or services. In order to continue to make pro�ts, then, companies must
control their costs of production.

In this unit we learn about the di�erent types of costs that companies incur and how those costs
behave. The types of costs are categorized as direct, indirect, and overhead costs. The way these
costs behave determines if they are �xed, variable, or a combination of both (“mixed”). Once the
type and behavior are identi�ed, the costs can be analyzed on a per-unit basis. This is needed
because we can see the total costs for a period of time by reviewing the �nancial statements of a
business; however, in order to control costs, managers must understand those costs at the unit
level.

Finally, we look at how costs are accumulated and accounted for across di�erent types of
businesses. These cost methods are job-costing, process costing, and activity-based costing. Once
managers understand the costs of production, they can use that information for various analyses,
which will be the subject of the next unit.

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Reading Assignment

1. Walther, L. M. & Skousen, C.J. (2009). Managerial and Cost Accounting. https://library.ku.ac.ke

/wp-content/downloads/2011/08/Bookboon/Accounting/managerial-and-cost-accounting.pdf

Chapter 3
Chapter 4
Chapter 12
Chapter 18
Chapter 21

This text provides an overview of the di�erent cost behaviors. It also explains the cost methods in
detail.

2. Heisinger, K., & Hoyle, J. B. (n.d.). Accounting for Managers. https://2012books.lardbucket.org

/books/accounting-for-managers/index.html

Chapter 1 – What is Managerial Accounting? Sections:

Cost Terminology
Chapter 5 – How Do Organizations Identify Cost Behavior Patterns? Sections:
Chapter Introduction
Cost Behavior Patterns

This text describes the di�erent types of costs and provides details on cost behaviors with applied
examples.

Optional Video

1.

Routh, B. (2017). Activity-based Costing - Simple Costing versus ABC [Video]. YouTube.

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Activity-based Costing - Simple Costin…

(4:20)

This video illustrates the di�erences in activity-based costing versus the traditional methods of
process and job costing.

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Discussion Assignment

In this graduate course, you are expected to participate often and engage in deep levels of
discourse.  Please post your initial response as early as possible and continue to participate
throughout the unit. You are required to post an initial response to the question/issue presented
in the Forum and then respond to at least 3 of your classmates’ initial posts.  You should also
respond to anyone who has responded to you. 

Your Discussion should be a minimum of 250 words in length and not more than 450 words.
Please include a word count. Following the APA standard, use references and in-text citations for
the textbook and any other sources. 

Select a public (i.e. one that publishes its �nancial information) manufacturing company and
become familiar with its products. Describe the company, its products, and the speci�c
manufacturing costs it incurs. Categorize each cost into the three manufacturing cost
categories and state if the costs are variable, �xed, or mixed. Explain how you came to your
conclusions.

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Written Assignment

Submit a paper which is 2-3 pages in length, exclusive of the reference page. The paper should be
double spaced in Times New Roman (or its equivalent) font, which is no greater than 12 points in
size. The paper should cite at least three sources in APA format.

In this paper, please discuss the three costing methods of job order costing, process costing, and
activity-based costing. 

De�ne each method and explain when it is best suited to be used. 

Compare and contrast the methods and consider their bene�ts and shortfalls. 
Use the information provided to propose which cost method should be used to allocate costs.

Wet Suit World is a company that manufactures wet suits for use with water sports such as
snorkeling and scuba diving. The suits are made in sizes small through 3x extra large with levels of
insulation layers of 2 millimeters, 5 millimeters, and 7 millimeters. They come in black with the
Wet Suit World logo imprinted across the chest. The materials are the same for all of the suits,
though they vary in thickness. All suits undergo the same production and quality inspection
processes.

There is no one “correct” answer to the proposed cost allocation method as long as the answer is
well-supported based on the week’s learning.

Superior papers will include the following when responding to the assignment question:

De�ne the three costing methods.

Explain when each is most appropriately used.
Compare and contrast the methods, considering both bene�ts and shortfalls.
Provide a well-supported proposal for the cost method Wet Suit World should use.

Be sure to use APA formatting in your paper.  Purdue University’s Online Writing LAB (OWL) is a
free website that provides excellent information and resources for understanding and using the
APA format and style. The OWL website can be accessed here: http://owl.english.purdue.edu
/owl/resource/560/01/

This assignment will be assessed using the BUS 5110 Unit 2 Written Assignment rubric.

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Portfolio Activity

This week we focused on manufacturing costs, but selling, general, and administrative (SG&A)
costs are also important. Using the company you selected for the discussion forum question, what
speci�c types of SG&A costs would the company incur? How would these costs be considered in
product costing?

As portfolio activities are to be self-re�ective, please make sure to connect the portfolio
assignment to:

Your personal experiences. Re�ect on how this assignment topic is applicable to and will
bene�t you.
Course readings and any external readings.
Discussion forum posts or course objectives.

The Portfolio Activity entry should be a minimum of 500 words and not more than 750 words. Use
APA citations and references if you use ideas from the readings or other sources.

This assignment will be assessed using the Portfolio rubric.

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Checklist

Peer assess Unit 1 Assignment

Read through the Learning Guide and the Reading Assignment
Complete the Discussion Assignment by posting in the Discussion Forum
Respond to and rate three of your fellow classmates’ posts in the Discussion Forum
Complete and submit the Case Study/Written Assignment.
Complete the Portfolio Assignment

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