Apr 22, 2024  
2022-2023 College Catalog 
2022-2023 College Catalog [ARCHIVED CATALOG]

ACC 233 - Cost Accounting

3 Credits, 3 Contact Hours
3 lecture periods 0 lab periods

Analysis of cost data for management planning, coordination and control. Includes the role of accounting information in management decision making, the cost function, cost-volume- profit analysis, relevant information for decision making, job costing, process costing, and costing methods. Also includes measuring and assigning support department costs, static and flexible budgets, standard costs and variance analysis, and strategic investment decisions.

Prerequisite(s): ACC 212  

Course Learning Outcomes
  1. Employ regression analysis to estimate a mixed cost function.
  2. Formulate a spreadsheet to perform cost-volume-profit (CVP) analysis.
  3. Evaluate constrained resource decisions utilizing Linear Programing within a spreadsheet application.
  4. Identify support departments and allocate their costs to other departments using the Reciprocal Method within a spreadsheet application.
  5. Prepare, present, and defend solutions to various problems throughout the course.

  1. The Cost Function
    1. Identifying relevant costs for a decision
    2. Cost behavior
    3. Cost estimation techniques
    4. Estimating the cost function
    5. Regression analysis
    6. Uses and limitations of cost estimates
  2. Cost-Volume-Profit (CVP) Analysis
    1. Cost-volume-profit analysis
    2. Performing CVP analysis with a spreadsheet
    3. Assumptions and limitations of CVP analysis
    4. Margin of safety and degree of operating leverage
  3. Relevant Information for Decision Making
    1. Relevant information for decision making
    2. Special orders
    3. Keep or drop decisions
    4. Insource or outsource decisions
    5. Product emphasis decisions
  4. Job Costing
    1. Assigning product costs to individual goods or services
    2. Job costing in manufacturing
    3. Allocating overhead
    4. General ledger entries for a manufacturer
    5. Service sector job costing
    6. Job cost information, decision making, and incentives
    7. Spoilage, rework and scrap in job costing
    8. Production quality and behavior issues
  5. Multi-Pool, Multi-Driver Costing Methods
    1. Activity-based costing (ABC)
    2. Assigning costs using an ABC system
    3. ABC in service organizations
    4. Activity-based management
    5. Other multi-pool, multi-driver cost accounting systems
  6. Measuring and Assigning Support Department Costs
    1. Support department cost allocation
    2. Process for allocating support department costs
    3. Direct method
    4. Step-down method
    5. Reciprocal method
    6. Single-versus dual-rate allocations
  7. Static and Flexible Budgets
    1. Budgets and the strategic management process
    2. Master budget
    3. Flexible budget
    4. Budgets as performance benchmarks
    5. Beyond traditional budgeting
  8. Standard Costs and Variance Analysis
    1. Variance analysis and the strategic management process
    2. Standard costing
    3. Direct cost variances
    4. Overhead variances
    5. Cost variance adjustments
  9. Strategic Investment Decisions
    1. Strategic investment decisions; capital budgeting, investment opportunities, quantitative and qualitative analyses.
    2. Net present value method
    3. Business risk and sensitivity analysis
    4. Internal rate of return
    5. Payback method
    6. Accrual accounting rate of return method
    7. Other considerations for strategic investment decisions
    8. Income taxes and the net present value method
  10. Strategic Pricing and Cost Management
    1. Target Costing
    2. Kaizen Costing
    3. Life Cycle Costing
    4. Pricing methods