Cost Accounting: Principles and Applications

by BROCK

• ISBN13: 9780072982480
• ISBN10: 0072982489
• Edition: 7th
• Format: Hardcover
• Copyright: 2006-08-04
• Publisher: McGraw-Hill/Irwin

Summary

Cost Accounting provides a practical knowledge of systems and procedures and will prepare students for many of the career opportunities available in cost accounting. The text opens by giving students an overview of the nature and purpose of cost accounting. Building on these notions students will then learn the basic concept that cost flow matches work flow. Afterward students are led throughout the major areas of cost accounting: job order cost accounting, process cost accounting, budgeting, standard costs, direct costing, and non-manufacturing costs. Each new segment of instruction is carefully explained and illustrated. A summary at the end of each chapter reviews the basic principles and procedures covered. Questions which require review and/or managerial analysis, along with application activities in the form of exercises, problems, alternate problems, Excel problems, and cases help students integrate their learning while everything is fresh in their minds.

Table of Contents

Preface	ix
PART ONE JOB ORDER COST ACCOUNTING	1	(258)
Introduction to Cost Accounting and the Job Order Cost Cycle	2	(39)
Introduction to Cost Accounting	2	(8)
Introduction to the Job Order Cost Cycle	10	(31)
Purchasing Materials	41	(22)
Need for Control of Materials	41	(1)
Materials Purchasing Procedures	42	(7)
Principles of Internal Control	49	(2)
Special Purchasing Procedures	51	(2)
Changing Technology in Materials Purchasing	53	(10)
Storing and Issuing Materials	63	(21)
Storage	63	(1)
Insurance	64	(2)
Principles of Internal Control	66	(2)
Special Issuing Procedures	68	(3)
Computerized Materials Issuance	71	(13)
Controlling and Valuing Inventory	84	(26)
Costing: A Complex Problem	84	(1)
Inventory Costing Methods	85	(7)
Applying the Rule of Cost or Market Whichever Is Lower	92	(3)
Inventory Management	95	(1)
Cutoff Date	95	(1)
Periodic Physical Inventory	96	(4)
Just-in-Time Inventory Management	100	(10)
Timekeeping and Payroll	110	(14)
Timekeeping Procedures	110	(1)
Payroll Procedures	111	(4)
Flow of Payroll Costs	115	(1)
Computerized Payroll	116	(8)
Charging Labor Costs into Production	124	(23)
Labor Cost Analysis	124	(5)
Transferring Labor Costs to Production	129	(3)
Flow of Costs	132	(1)
Employer's Payroll Taxes	133	(14)
Departmentalizing Overhead Costs	147	(22)
Types of Manufacturing Overhead Costs	147	(1)
Control of Manufacturing Overhead Costs	148	(1)
Departmentalization of Overhead	148	(2)
Recording Overhead Costs	150	(3)
Summary Schedule of Departmental Costs	153	(1)
Allocating Overhead to Jobs	153	(1)
Distributing Service Department Costs	153	(4)
Recording Overhead Distribution in the General Ledger	157	(12)
Setting Overhead Rates	169	(19)
Purpose of Overhead Rates	169	(1)
Determining the Overhead Rate	169	(1)
Factors That Affect Rate Setting	170	(1)
Types of Overhead Rate Bases	171	(2)
Selecting the Overhead Basis	173	(1)
Setting Rates	174	(1)
Computing Departmental Rates	175	(1)
Activity Based Costing	176	(1)
Overhead Allocation Using Activity Based Costing	177	(11)
Applying Manufacturing Overhead	188	(19)
Entries on Job Cost Sheet	188	(1)
Entries in The General Ledger	189	(2)
Overapplied or Underapplied Overhead	191	(16)
Completing the Cost Cycle and Accounting for Lost Materials	207	(37)
Completing the Cost Cycle	207	(9)
Scrap, Spoiled Goods, and Defective Goods	216	(28)
Mini-Practice Set 1	244	(15)
PART TWO PROCESS COST ACCOUNTING	259	(200)
Process Cost System---Production Data and Cost Flow	260	(48)
Introduction to Process Cost Accounting	260	(15)
Production Data and Cost Flow	275	(33)
Average Costing of Work in Process	308	(32)
Accounting for Beginning Work in Process	308	(1)
Applying the Average Cost Method---Bowden's Boards	309	(16)
Combined Cost of Production Report	325	(15)
Units Lost or Increased in Production	340	(35)
Classifying Losses or Spoilage	340	(1)
Accounting for Lost Units	341	(1)
Normal Loss of Units in First Department	341	(4)
Normal Loss of Units in Subsequent Departments	345	(5)
Abnormal Loss of Units	350	(4)
Defective Units and Rework Costs	354	(1)
Accounting for Increase in Units	354	(21)
First in, First out (FIFO) Costing of Work in Process	375	(37)
Differences Between Average Cost Method and FIFO Cost Method	375	(1)
Choosing a Costing Method	376	(1)
Pressing and Cutting Department	376	(6)
Trimming and Painting Department	382	(4)
Determining Bowden's Boards' Costing Method	386	(4)
Appendix---FIFO method, Lost Units	390	(9)
Equivalent Units-Alternate Computation	399	(13)
Accounting for By-Products and Joint Products	412	(47)
Multiple-Product Processing	412	(1)
Methods of Accounting for By-Products	413	(1)
Paddy Rice Company	413	(2)
By-Products Not Processed Further	415	(2)
By-Products Processed Further	417	(4)
Computing Net Profit	421	(2)
Processing Joint Products	423	(1)
Bases for Allocating Joint Costs	423	(1)
Uncle Walter's Dairy Products Company	424	(3)
Allocation on Basis of Physical Units	427	(1)
Allocation on Basis of Relative Sales Value	428	(2)
Allocation on Basis of Adjusted Sales Value	430	(3)
Allocation on Basis of Assigned Weights	433	(3)
Limitations of Joint Costing	436	(23)
Mini-Practice Set 2	452	(7)
PART THREE COST ACCOUNTING AS A MANAGEMENT TOOL	459	(230)
The Analysis of Cost Behavior	460	(22)
Cost Behavior	460	(4)
Methods of Analyzing Cost Behavior	464	(6)
Selecting the Method of Analysis	470	(12)
Budgeting	482	(25)
Budgetary Control	482	(1)
The Sales Budget	483	(1)
The Production Budget	484	(1)
Manufacturing Costs Budget	485	(7)
Operating Expenses Budget	492	(1)
Budgeted Income Statement	493	(1)
Other Budgeted Schedules	493	(1)
Using the Flexible Budget as a Management Tool	494	(1)
Periodic Performance Report	494	(1)
Other Budgetary Considerations	495	(12)
Standard Costs: Materials and Labor	507	(22)
Using Standard Costs	507	(2)
Implementing a Standard Cost System	509	(5)
Labor Costs	514	(15)
Manufacturing Overhead Standard Costs: Completing the Accounting Cycle for Standard Costs	529	(40)
An Overview of Standard Manufacturing Overhead Costs	529	(1)
Setting Up a Standard Cost System for Overhead	530	(1)
Establishing Standard Overhead Cost per Unit of Product	531	(3)
Recording Actual Costs	534	(2)
Determining Standard Costs for Period	536	(1)
Measuring and Analyzing the Total Overhead Variance	536	(12)
Applying Overhead and Recording Overhead Variances	548	(2)
Disposition of Standard Cost Variances	550	(19)
Mini-Practice Set 3	564	(5)
Cost-Volume-Profit Analysis	569	(25)
Direct Costing	569	(1)
A Comparison of Absorption Costing and Direct Costing	570	(5)
Cost-Volume-Profit Analysis	575	(6)
Analyzing the Effects of Changes in C-V-P Factors	581	(13)
Analysis of Manufacturing Costs for Decision Making	594	(23)
Decision Making	594	(1)
Defining the Problem and Identifying Alternatives	594	(1)
Determining Relevant Cost and Revenue Data	595	(1)
Evaluating Data and Considering Nonmeasurable Data	596	(1)
Making a Decision	596	(1)
Common Decisions in a Cost Accounting Environment	596	(21)
Cost Accounting for Distribution Activities and Service Businesses	617	(38)
Using Cost Accounting in Nonmanufacturing Activities	617	(1)
Distribution Cost Analysis and Control	618	(1)
Analyzing Distribution Costs	619	(6)
Budgets for Distribution Costs	625	(7)
Cost Accounting for Service Businesses	632	(23)
Decision Making---Capital Investment Decisions	655	(34)
The Nature of Capital Expenditures	656	(1)
Capital Expenditure Analysis	656	(2)
Capital Expenditure Evaluation Techniques	658	(1)
Evaluation Techniques Focusing on Profitability	659	(7)
Evaluation Techniques Focusing on Cash Flows	666	(9)
The Role of Income Taxes in Capital Investment Evaluation	675	(14)
Glossary	689	(8)
Index	697