Full time MBA-Ifrane Spring 2023

Managerial Accounting
Dr. SATT Harit
ACC 5302

Cost Concepts – An Application

CONTEXT

After being introduced to the different types of costs in Chapter 2, it is time for you to grasp their practical notion by

applying the different concepts to the operations of the respective companies in which you are currently working.

INTENDED OUTCOMES

- To identify basic Managerial Accounting concepts

- To apply basic Managerial Accounting concepts

- To analyze different cost concepts for enhanced decision making

THE PROCESS

This is a qualitative analysis of the cost structures of your respective companies. First, you need to identify the different cost concepts

that apply to the company (manufacturing or nonmanufacturing company). Second, provide a general description of each type of cost

that applies to your company, and explain why it is that the other types of costs do not apply. Finally, provide a concrete and detailed

example from your company for each type of cost that applies. Do you remember manufacturing and nonmanufacturing? Variable,

fix and mix? Differential cost, sunk and opportunity cost? What about your favorite ones: direct and indirect cost? You are the expert

now, you know your company/institution better that anyone else (among us), apply the concepts and make your assumptions. What

are the risks implied by such an allocation of costs (i.e. if the company is heavily outsourcing, there is the risk of losing control,

etc...)? What would be an alternative –Think outside the box-?