MANAGEMENT ACCOUNTING De La Salle - Professional Schools, Inc. Graduate School of Business RCBC Campus Module 2 Full Costing - Full Costs and Their Uses (Free Accounting. Text and Cases by Antony, Hawiins, ag Merchant, | th ion) Topic Outline = Introduction to Full Cost Concepts ™ Description of Full Cost Accounting System = Discussion of the Uses of Full Cost InformationDefinition of "Cost" . +. is a measurement , in monetary terms, of the amount of resources used for some PUPPOSE. (Axton) What is "Full Cost"? Cost Object cS The Pct All Resources Full Cost : Definition of "Cost Object" «++ is the technical name for the product, project, organizational unit, or other activity or purpose for which costs are measured. Taare Categories of Costs 136Direct Costs Indirect Costs Those costs that cannot be traced directly to Those costs that become an integral part specific unts prodiced of a product and that can be conveniently traced directly to it. Examples: The Product samples Wire otis pape lp (Ore mars ant wes plo ate) woes rex Lab) What is the "Full Cost" of a Cost Object? | | Indiect Costs Ful Cost of Cos! Object 17-10Elements of Product Cost _ & Cc) * \K J ‘arli oed sect ‘The mos! common cost ote of hterestina business ‘ea "Preduct Elements of Product Cost Elements of Product Cost Materia Later Services Product Costing System Thay at acces anceps thos oduct ales "Produc Costing Syston’ | Cost of Goods Sold - Trading vs. Manufacturing | | ‘Trading Company Manufacturing Company | Cont o gods so Cest of goods a: Taventry, beg. 123" Inveiory bez of Ad Purchases 456 "Tnithed goods 123 Con of goes nitable At Cos of gots for sik 59 manncnned 56 AY 0 Cost of goods available ~ 40 foros 379 Less Inventory ending | oF nithed good 110 Cost of goods old 469 1414Cost of Goods Manufactured Cost of goods manufactured: Direct materiale vxeds Direct materials used Inventory beg of Direct tbor ‘aw materals Factory overhesd Add Raw materiale ‘Total Manafactaring Cost purchases Add Work in process Cost of materials avaiable forse Less Inventory ending of ra materials Direct maeriais used n Cost Systems Balance Sheet Income Statement Costs Inventories Expenses ==] | rnscoe [ool SE Sia 22° | ome [ome = | wena | Pato ete USES - Outline ® Introduction to Full Cost Concepts * Description of Full Cost Accounting or "Product Costing" System * Discussion of the Uses of Full Cost Information FULL COSTS AND THEIR USES - Outline * Introduction to Full Cost Concepts ™ Description of Full Cost Accounting or "Product Costing" System ® Discussion of the Uses of Full Cost Information FULL COSTS AND THEIR 115-18Uses of Full Cost End of Full Costing and Their ses 119-22