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Basic Product Costing Concepts.mp4
 
37:38
Basic product costing concepts video
Views: 84947 K S
Product Costs in Manufacturing (aka Inventoriable Costs)
 
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This video explains the concept of product costs (aka inventoriable costs) for a manufacturing firm. An example is provided to illustrate how product costs attach to a product (first as inventory, then later through cost of goods sold), as opposed to period costs which are expensed as incurred (and thus are not attached to the product or affected by its flow). Edspira is your source for business and financial education. To view the entire video library for free, visit http://www.Edspira.com To like us on Facebook, visit https://www.facebook.com/Edspira Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. The goal of Michael's life is to increase access to education so all people can achieve their dreams. To learn more about Michael's story, visit http://www.MichaelMcLaughlin.com To follow Michael on Facebook, visit https://facebook.com/Prof.Michael.McLaughlin To follow Michael on Twitter, visit https://twitter.com/Prof_McLaughlin
Views: 29861 Edspira
Product Costing
 
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Bob wants to know how much his bakery products cost to manufacture. Bobs applies job costing and process costing principles to work out the cost of two products in his bakery.
Topic 8 - Product costing
 
01:26:59
A recording of Lecture 8 of Accounting for Managerial Decisions for the Autumn 2016 session. Provides an introduction to product costing. Recorded on May 19, 2016.
Views: 3356 drdavebond
Job Order Costing vs Process Costing
 
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This video discusses the differences between job-order costing and process costing in the context of managerial accounting. Examples are provided to illustrate how job-order costing is used for heterogeneous products while process costing is used for homogeneous products, with an emphasis on how costs flow through departments rather than jobs under process costing (with work-in-process inventory accounts for each department). Edspira is your source for business and financial education. To view the entire video library for free, visit http://www.Edspira.com To like us on Facebook, visit https://www.facebook.com/Edspira Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. The goal of Michael's life is to increase access to education so all people can achieve their dreams. To learn more about Michael's story, visit http://www.MichaelMcLaughlin.com To follow Michael on Facebook, visit https://facebook.com/Prof.Michael.McLaughlin To follow Michael on Twitter, visit https://twitter.com/Prof_McLaughlin
Views: 63308 Edspira
Activity Based Costing vs. Traditional Costing
 
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This video discusses the key differences between Activity Based Costing and traditional costing systems in the context of managerial accounting. Edspira is your source for business and financial education. To view the entire video library for free, visit http://www.Edspira.com To like us on Facebook, visit https://www.facebook.com/Edspira Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. The goal of Michael's life is to increase access to education so all people can achieve their dreams. To learn more about Michael's story, visit http://www.MichaelMcLaughlin.com To follow Michael on Facebook, visit https://facebook.com/Prof.Michael.McLaughlin To follow Michael on Twitter, visit https://twitter.com/Prof_McLaughlin
Views: 150422 Edspira
Process Costing
 
12:16
This video explains the concept of process costing in managerial accounting. Process costing is compared and contrasted with job-order costing, and an example is provided to illustrate the cost flows and associated journal entries of a process costing system. Edspira is your source for business and financial education. To view the entire video library for free, visit http://www.Edspira.com To like us on Facebook, visit https://www.facebook.com/Edspira Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. The goal of Michael's life is to increase access to education so all people can achieve their dreams. To learn more about Michael's story, visit http://www.MichaelMcLaughlin.com To follow Michael on Facebook, visit https://facebook.com/Prof.Michael.McLaughlin To follow Michael on Twitter, visit https://twitter.com/Prof_McLaughlin
Views: 176607 Edspira
Cost Calculations Using an Excel Spreadsheet.mp4
 
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This video shows the cost calculations that are a part of the normal Econ 101 class. This is a normal part of the section that is often called the theory of the firm. It describes the process by which a price taker firm (a firm in pure competition) decides what quantity to produce given its costs and given some possible market prices that it will receive for the good it sells. This video uses tables to tell this story. Unfortunately this video is not an accounting video and will not be of much help in formulating a business plan. It is intended to explain one of the core sections of a principles of microeconomics class.
Views: 197208 mcneilecon
Job Costing - Flow of Costs
 
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Job Costing versus Process Costing; Flow of Costs, continued https://youtu.be/OdUlcAwczRc
Absorption Costing
 
20:09
This video explains the concept of Absorption Costing in Managerial Accounting. A comprehensive example is provided to explain how absorption costing is used to calculate per unit product costs as well as to create an absorption costing income statement. The video also contrasts the absorption costing method with the variable cost method and discusses how the use of absorption costing can lead to distorted measures of profitability and perverse managerial incentives. Edspira is your source for business and financial education. To view the entire video library for free, visit http://www.Edspira.com To like us on Facebook, visit https://www.facebook.com/Edspira Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. The goal of Michael's life is to increase access to education so all people can achieve their dreams. To learn more about Michael's story, visit http://www.MichaelMcLaughlin.com To follow Michael on Facebook, visit https://facebook.com/Prof.Michael.McLaughlin To follow Michael on Twitter, visit https://twitter.com/Prof_McLaughlin
Views: 208509 Edspira
Traditional Cost & Activity Costing System
 
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Under traditional method indirect cost are distributed on end product on the assumption that products consume resources in proportion to production volumes. Activity based costing calculate the cost of individual activities and assign cost to cost object such as product and service on the basis of activities undertaken to produce each product or service.
Views: 15810 edu wala
Product costing Introduction
 
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This Vedio is about Product Costing Introduction. if you any queries you can send mail to my id:[email protected]//Call @ 9902312118.
Views: 7209 SAP FICO Vision
Activity Based Costing (with full-length example)
 
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This video explains the process of Activity-based Costing and illustrates how Activity-based Costing is used with an example. Edspira is your source for business and financial education. To view the entire video library for free, visit http://www.Edspira.com To like us on Facebook, visit https://www.facebook.com/Edspira Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. The goal of Michael's life is to increase access to education so all people can achieve their dreams. To learn more about Michael's story, visit http://www.MichaelMcLaughlin.com To follow Michael on Facebook, visit https://facebook.com/Prof.Michael.McLaughlin To follow Michael on Twitter, visit https://twitter.com/Prof_McLaughlin
Views: 151216 Edspira
Job Costing - Flow of Costs
 
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Manufacturing costs Product costs Flow of costs in manufacturing t-accounts Allocating overhead Example of calculating overhead applied under normal costing and actual costing
Managerial Accounting: 5 Steps to Process Costing
 
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Help us caption & translate this video! http://amara.org/v/Fxz9/
Views: 13785 ProfAlldredge
Variable Costing (the Variable Costing method in Managerial Accounting)
 
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This video explains the Variable Costing method that some manufacturing firms use internally to compute product costs and calculate cost of goods sold. An example is provided to illustrate how to use Variable Costing to calculate the product cost per unit and to create a Variable Costing Income Statement. The video also discusses the difference between Variable Costing and Absorption Costing and explains why Variable Costing is in many ways superior to Absorption Costing. Edspira is your source for business and financial education. To view the entire video library for free, visit http://www.Edspira.com To like us on Facebook, visit https://www.facebook.com/Edspira Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. The goal of Michael's life is to increase access to education so all people can achieve their dreams. To learn more about Michael's story, visit http://www.MichaelMcLaughlin.com To follow Michael on Facebook, visit https://facebook.com/Prof.Michael.McLaughlin To follow Michael on Twitter, visit https://twitter.com/Prof_McLaughlin
Views: 68715 Edspira
Activity Based Costing Examples - Managerial Accounting video
 
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Activity Based Costing Example - Accounting video by TheAccountingDr is a tutorial video with examples on using an activity-based costing system: 1) calculate the allocation rate and 2) allocated costs (overhead/indirect costs) using the allocation rate. In addition, we calculate the indirect costs per unit of planned products as well as the product costs per unit of planned products (direct materials + direct labor + OH). Managerial Accounting lecture notes: http://tiny.cc/nw1enw Activity-Based Costing terminology review game: http://tiny.cc/mxgoow -- Thank you all for your wonderful support. Because of your support we have been able to reach and help numerous accounting students. Please continue to be a part of our mission to help other accounting students be successful by giving our videos thumbs up, giving comments and adding our videos to your favorites. Subscribe: http://www.youtube.com/subscription_center?add_user=routhwsuedu Friend me on Facebook and post your questions: http://www.facebook.com/TheAccountingDoctor -- For more accounting/how to eLectures (and accompanying lecture notes) similar to Activity-Based Costing Examples - Managerial Accounting video, blog, FAQs and accounting eBooks visit http://www.TheAccountingDr.com. Activity-Based Costing Examples - Managerial Accounting video: http://youtu.be/7SNjEHIYjns -- Please note that videos may require Flash media and may not play on devices without Flash capabilities (i.e. iPad). If you are having difficulty viewing this video on YouTube, these videos may also be viewed without Flash on my website at http://www.TheAccountingDr.com.
Job Order Costing Explained | Managerial Accounting | CMA Exam | Ch 3 P 1
 
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Under absorption costing, product costs include all manufacturing costs. Some manufacturing costs, such as direct materials, can be directly traced to particular products. For example, the cost of the airbags installed in a Toyota Camry can be easily traced to that particular auto. But what about manufacturing costs like factory rent? Such costs do not change from month to month, whereas the number and variety of products made in the factory may vary dramatically from one month to the next. Because these costs remain unchanged from month to month regardless of what products are made, they are clearly not caused by—and cannot be directly traced to—any particular product. Therefore, these types of costs are assigned to products and services by averaging across time and across products. The type of production process influences how this averaging is done. Job-order costing is used in situations where many different products, each with individual and unique features, are produced each period. For example, a Levi Strauss clothing factory would typically make many different types of jeans for both men and women during a month. This is a custom product that is being made for the first time, but if this were one of the company’s standard products, it would have an established bill of materials. A bill of materials is a document that lists the type and quantity of each type of direct material needed to complete a unit of product. The materials requisition form is a document that specifies the type and quantity of materials to be drawn from the storeroom and identifies the job that will be charged for the cost of the materials. The form is used to control the flow of materials into production and also for making entries in the accounting records. A job cost sheet records the materials, labor, and manufacturing overhead costs charged to that job. Measuring Direct Labor Cost Direct labor consists of labor charges that can be easily traced to a particular job. Labor charges that cannot be easily traced directly to any job are treated as part of manufacturing overhead. As discussed in a previous chapter, this latter category of labor costs is called indirect labor and includes tasks such as maintenance, supervision, and cleanup. Today many companies rely on computerized systems (rather than paper and pencil) to maintain employee time tickets. A completed time ticket is an hour-by-hour summary of the employee’s activities throughout the day. One computerized approach to creating time tickets uses bar codes to capture data. Computing Predetermined Overhead Rates. There are three reasons for this: Manufacturing overhead is an indirect cost. This means that it is either impossible or difficult to trace these costs to a particular product or job. Manufacturing overhead consists of many different types of cost ranging from the grease used in machines to the annual salary of the production manager. Some of these costs are variable overhead costs because they vary in direct proportion to changes in the level of production (e.g., indirect materials, supplies, and power) and some are fixed overhead costs because they remain constant as the level of production fluctuates (e.g., heat and light, property taxes, and insurance).Page 123 Because of the fixed costs in manufacturing overhead, total manufacturing overhead costs tend to remain relatively constant from one period to the next even though the number of units produced can fluctuate widely. Consequently, the average cost per unit will vary from one period to the next. An allocation base is a measure such as direct labor-hours (DLH) or machine-hours (MH) that is used to assign overhead costs to products and services. The most widely used allocation bases in manufacturing are direct labor-hours, direct labor cost, machine-hours and (where a company has only a single product) units of product. Job order costing, Direct cost, indirect cost, common cost, manufacturing overhead cost, indirect material, job cost sheet, job number, subsidiary ledger, material requisition form, bill of materials, time ticket, allocation base predetermined overhead rate, cost driver, fixed overhead, variable overhead Raw materials, work in process, finished goods, cost of goods manufactured, manufactured overhead cost Cost of goods manufactured Underapplied, overapplied
Job Order Costing - Part 1 - Management Accounting
 
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The links to the problems are no longer working. If you want updated videos (with working links) try this playlist: https://youtu.be/2eG_UVdoJrA In this series of videos, we examine job order costing and the predetermined overhead rate. In the first video, we will look at cost concepts and the predetermined overhead rate. In the next 3 parts we will do a comprehensive example of job order costing involving journal entries, applying overhead and generating an income statement. This video and the attached worksheet were prepared by Tony Bell of Thompson Rivers University (TRU) - I encourage educators to freely use, edit and modify these videos and the attached worksheet - they are available under Creative Commons Licenses.
Views: 177905 Tony Bell
Activity Based Costing Systems for Overhead (Cost Accounting Tutorial #28)
 
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Full Crash Course on Udemy for $9.99: http://bit.ly/2Dhip74 Activity based costing (ABC) systems provide a way of splitting overhead costs into different overhead activities. The costs are then allocated to products or projects proportionally by their cost driver activity levels. Join us as we go through an example to explain ABC costing. Website: http://www.notepirate.com Follow us on Facebook: https://www.facebook.com/pages/Note-Pirate/514933148520001?ref=hl Follow us on Twitter: http://twitter.com/notepirate We appreciate all of the support you guys have given us. Be apart of the mission to help us reach more students by subscribing, thumbs upping and adding the videos to your favorites! ** Notepirate is privately owned and exclusive to Notepirate.com.**
Views: 29698 Notepirate
Process Costing with Example | Managerial Accounting | CMA Exam | Ch 4 P 1
 
22:17
Process costing is used when there is mass production of similar products, where the costs associated with individual units of output cannot be differentiated from each other. In other words, the cost of each product produced is assumed to be the same as the cost of every other product. Under this concept, costs are accumulated over a fixed period of time, summarized, and then allocated to all of the units produced during that period of time on a consistent basis. When products are instead being manufactured on an individual basis, job costing is used to accumulate costs and assign the costs to products. When a production process contains some mass manufacturing and some customized elements, then a hybrid costing system is used. Examples of the industries where this type of production occurs include oil refining, food production, and chemical processing. For example, how would you determine the precise cost required to create one gallon of aviation fuel, when thousands of gallons of the same fuel are gushing out of a refinery every hour? The cost accounting methodology used for this scenario is process costing. Process costing is the only reasonable approach to determining product costs in many industries. It uses most of the same journal entries found in a job costing environment, so there is no need to restructure the chart of accounts to any significant degree. This makes it easy to switch over to a job costing system from a process costing one if the need arises, or to adopt a hybrid approach that uses portions of both systems. Example of Process Cost Accounting As a process costing example, ABC International produces purple widgets, which require processing through multiple production departments. The first department in the process is the casting department, where the widgets are initially created. During the month of March, the casting department incurs $50,000 of direct material costs and $120,000 of conversion costs (comprised of direct labor and factory overhead). The department processes 10,000 widgets during March, so this means that the per unit cost of the widgets passing through the casting department during that time period is $5.00 for direct materials and $12.00 for conversion costs. The widgets then move to the trimming department for further work, and these per-unit costs will be carried along with the widgets into that department, where additional costs will be added. Types of Process Costing There are three types of process costing, which are: Weighted average costs. This version assumes that all costs, whether from a preceding period or the current one, are lumped together and assigned to produced units. It is the simplest version to calculate. Standard costs. This version is based on standard costs. Its calculation is similar to weighted average costing, but standard costs are assigned to production units, rather than actual costs; after total costs are accumulated based on standard costs, these totals are compared to actual accumulated costs, and the difference is charged to a variance account. First-in first-out costing (FIFO). FIFO is a more complex calculation that creates layers of costs, one for any units of production that were started in the previous production period but not completed, and another layer for any production that is started in the current period. There is no last in, first out (LIFO) costing method used in process costing, since the underlying assumption of process costing is that the first unit produced is, in fact, the first unit used, which is the FIFO concept. Why have three different cost calculation methods for process costing, and why use one version instead of another? The different calculations are required for different cost accounting needs. The weighted average method is used in situations where there is no standard costing system, or where the fluctuations in costs from period to period are so slight that the management team has no need for the slight improvement in costing accuracy that can be obtained with the FIFO costing method. Alternatively, process costing that is based on standard costs is required for costing systems that use standard costs. It is also useful in situations where companies manufacture such a broad mix of products that they have difficulty accurately assigning actual costs to each type of product; under the other process costing methodologies, which both use actual costs, there is a strong chance that costs for different products will become mixed together. Process costing, equivalent units of production, FiFO method, weighted average, conversion cost flow of costs, cost accounted for, cpa exam, managerial accounting, raw materials, job order costing, work in process, processing departments, transferred-in cost, transferred out cost
Variable and Absorption Costing - Lesson 1
 
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In 4.06 Variable and Absorption Costing – Lesson 1, Roger Philipp, CPA, CGAM, gives a high-energy conceptual whiteboard demonstration on the two most commonly-used types of income statements for manufacturing companies. After just five minutes you'll have a better understanding of the differences between absorption costing (GAAP) and variable costing (non-GAAP, internal use) income statements. One first subtracts product costs from revenue, then subtracts period costs from this gross margin to arrive at pretax operating income. The other subtracts variable costs from revenue, then subtracts fixed costs from this contribution margin to arrive at pretax operating income. Roger warns that the operating income amounts will never be the same due to the different methods’ treatment of fixed Cost of Goods Sold and fixed manufacturing costs. Roger also explains why contribution margin is called contribution margin while looking ahead to breakeven analysis, which is covered later in BEC. In this particular lesson, Roger sets the stage for Lesson 2, where the differences between variable and absorption costing will be shown through specific examples. Connect with us: Website: https://www.rogercpareview.com Blog: https://www.rogercpareview.com/blog Facebook: https://www.facebook.com/RogerCPAReview Twitter: https://twitter.com/rogercpareview LinkedIn: https://www.linkedin.com/company/roger-cpa-review Are you accounting faculty looking for FREE CPA Exam resources in the classroom? Visit our Professor Resource Center: https://www.rogercpareview.com/professor-resource-center/ Video Transcript Sneak Peek: Okay now let's talk about variable verse absorption costing. Now these are two different basic ways of presenting an income statement for a manufacturing company. Looking at this we're gonna have absorption costing which absorbs certain costs. This is what GAP says. This is for external reporting purposes. This is product versus period costs versus direct variable prime contribution margin income statement. This is sales minus variable equals contribution margin minus fixed equals your pretax operative income. This one separates variable from fixed costs.
Views: 49220 Roger CPA Review
3 Minutes! Activity Based Costing Managerial Accounting Example (ABC Super Simplified)
 
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For Part 2, Go To http://mbabullshit.com/ If You Liked it, Support my Free Videos at https://www.patreon.com/MBAbull Activity Based Costing Example In 3 Minutes Activity Based Costing is different from traditional costing... Traditional costing is easy because if often just divides some types of costs equally between different items. These are usually costs which are a bit difficult to divide or allocate between products, such as electricity, telephone bills, internet usage, rent, salaries, and others.However, Activity Based Costing finds ways to divide or allocate these costs more proportionally or "fairly"... ...so that we can write down a higher cost for items or products which use more of the stuff related to costs. For example, we might want to write down a higher electric power cost for burgers than for lemonades. As a result, this might cause us to sell our burgers at a higher price than the lemonades, and the lemonades at a lower price than the burgers. Of course, electric power is not the only cost in making burgers and lemonades. Therefore, we have to think about other costs as well before making our final pricing decisions. Check out my free video at http://www.MBAbullshit.com See ya there!
Views: 177818 MBAbullshitDotCom
Intro to Managerial Accounting: Job Order Costing #3 Journal Entries & Dealing with Overhead (Ch. 4)
 
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Introduction to Managerial Accounting Professor Savita Sahay Costing Systems (Part 3) Job Order Costing: Journal Entries & Dealing with Overheads Please visit our website at http://raw.rutgers.edu TIME STAMPS The Manufacturing Cost Flow: 0:25 Journal Entries for Common Transactions: 0:47 - Purchase of materials on credit - Requisition of direct and indirect materials (overhead) into production. - Incurred direct & indirect (overhead) labor wages Journal Entries (continued): 3:52 - Incurring various actual indirect costs - Allocation or application of indirect costs (overhead) to the work-in-process (WIP) account is based on a predetermined overhead rate. Journal Entries (continued): 5:30 - Products are completed & transferred out of production in preparation for being sold. - Products are sold to customers - The associated costs are transferred to an expense (cost) account Word Problems: 6:46 - The journal entry if materials were purchased on account - The journal entry if direct materials and indirect materials are sent to the plant floor Word Problem: 7:57 - The journal entry to record the insurance of the actual manufacturing overhead costs The Manufacturing Cost Flow (revisited): 8:27 The purchase of materials on credit involves debiting the materials accounting and crediting the accounts payable account. The requisition of direct and indirect materials (overhead) into production involves debiting the work-in-process account (WIP) and manufacturing overhead account, and then crediting the materials account. When incurring direct and indirect overhead labor wages, you debit WIP and manufacturing OH and credit cash. When incurring actual indirect costs, you would debit manufacturing overhead and credit the applicable cost (factory rent payable, accounts payable, accumulated depreciation, and prepaid expenses are all examples given in the video, although there could be others). The allocation or application of indirect costs (overhead) to the work-in-process account is based on a predetermined overhead rate and can be journalized by debiting WIP and crediting the manufacturing overhead applied account. Products completed and transferred out of production in preparation for being sold can be journalized by debiting finished goods and crediting work-in-process. When products are sold to customers, accounts receivable is debited and sales is credited. When associated costs are transferred to an expense account (or a cost account), cost of goods sold is debited and finished goods are credited. Before ending the lecture, the professor reviews the manufacturing overhead account and discusses what to do in situations where one side of the manufacturing overhead account (MOH) is either over or under applied. To receive additional updates regarding our library please subscribe to our mailing list using the following link: http://rbx.business.rutgers.edu/subscribe.html
Views: 24161 Rutgers Accounting Web
Job Order Costing
 
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This video explains what job order costing is in the context of managerial accounting. An example is provided to illustrate how a job cost sheet is completed to account for the cost of a job under the job order costing method. Edspira is your source for business and financial education. To view the entire video library for free, visit http://www.Edspira.com To like us on Facebook, visit https://www.facebook.com/Edspira Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. The goal of Michael's life is to increase access to education so all people can achieve their dreams. To learn more about Michael's story, visit http://www.MichaelMcLaughlin.com To follow Michael on Facebook, visit https://facebook.com/Prof.Michael.McLaughlin To follow Michael on Twitter, visit https://twitter.com/Prof_McLaughlin
Views: 89808 Edspira
Managerial Accounting 4.2: Product Cost Flows in a Process Costing System
 
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This video describes the flow of product costs in a process costing system.
Views: 568 KurtHeisinger
Example: Process Costing | Managerial Accounting | CMA Exam | Ch 4 P 2
 
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Process costing is used when there is mass production of similar products, where the costs associated with individual units of output cannot be differentiated from each other. In other words, the cost of each product produced is assumed to be the same as the cost of every other product. Under this concept, costs are accumulated over a fixed period of time, summarized, and then allocated to all of the units produced during that period of time on a consistent basis. When products are instead being manufactured on an individual basis, job costing is used to accumulate costs and assign the costs to products. When a production process contains some mass manufacturing and some customized elements, then a hybrid costing system is used. Examples of the industries where this type of production occurs include oil refining, food production, and chemical processing. For example, how would you determine the precise cost required to create one gallon of aviation fuel, when thousands of gallons of the same fuel are gushing out of a refinery every hour? The cost accounting methodology used for this scenario is process costing. Process costing is the only reasonable approach to determining product costs in many industries. It uses most of the same journal entries found in a job costing environment, so there is no need to restructure the chart of accounts to any significant degree. This makes it easy to switch over to a job costing system from a process costing one if the need arises, or to adopt a hybrid approach that uses portions of both systems. Example of Process Cost Accounting As a process costing example, ABC International produces purple widgets, which require processing through multiple production departments. The first department in the process is the casting department, where the widgets are initially created. During the month of March, the casting department incurs $50,000 of direct material costs and $120,000 of conversion costs (comprised of direct labor and factory overhead). The department processes 10,000 widgets during March, so this means that the per unit cost of the widgets passing through the casting department during that time period is $5.00 for direct materials and $12.00 for conversion costs. The widgets then move to the trimming department for further work, and these per-unit costs will be carried along with the widgets into that department, where additional costs will be added. Types of Process Costing There are three types of process costing, which are: Weighted average costs. This version assumes that all costs, whether from a preceding period or the current one, are lumped together and assigned to produced units. It is the simplest version to calculate. Standard costs. This version is based on standard costs. Its calculation is similar to weighted average costing, but standard costs are assigned to production units, rather than actual costs; after total costs are accumulated based on standard costs, these totals are compared to actual accumulated costs, and the difference is charged to a variance account. First-in first-out costing (FIFO). FIFO is a more complex calculation that creates layers of costs, one for any units of production that were started in the previous production period but not completed, and another layer for any production that is started in the current period. There is no last in, first out (LIFO) costing method used in process costing, since the underlying assumption of process costing is that the first unit produced is, in fact, the first unit used, which is the FIFO concept. Why have three different cost calculation methods for process costing, and why use one version instead of another? The different calculations are required for different cost accounting needs. The weighted average method is used in situations where there is no standard costing system, or where the fluctuations in costs from period to period are so slight that the management team has no need for the slight improvement in costing accuracy that can be obtained with the FIFO costing method. Alternatively, process costing that is based on standard costs is required for costing systems that use standard costs. It is also useful in situations where companies manufacture such a broad mix of products that they have difficulty accurately assigning actual costs to each type of product; under the other process costing methodologies, which both use actual costs, there is a strong chance that costs for different products will become mixed together. Process costing, equivalent units of production, FiFO method, weighted average, conversion cost flow of costs, cost accounted for, cpa exam, managerial accounting, raw materials, job order costing, work in process, processing departments, transferred-in cost, transferred out cost
Activity Based Costing Example in 6 Easy Steps - Managerial Accounting with ABC Costing
 
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Clicked here http://www.MBAbullshit.com/ and OMG wow!I'm SHOCKED how easy.. Imagine your brand makes two types of mobile phone devices. They are each produced working with one machine. The maintenance cost of the apparatus is $100 a month. What percentage should each style of telephone share under the maintenance cost? In order to be "just", some will suggest that the cost must be divided 50%-50%. However, what if Phone A consumes 90 hours of the machinery, and Phone B uses only 10 hours of the apparatus? Should the cost remain to be split 50%-50%? As part of classic "allocated" costing, the cost should probably still be split 50%-50%. However applying the principle of Activity Based Costing, it needs to most likely be cut up 90%-10% for the reason that one phone type is based on 90 hours of the apparatus monthly while the other cell phone form typically only consumes 10 hours of the identical device. The foregoing technique makes use of "amount of activity" for being a function of costing, and not just "allocation" where accountants simplistically allot the costs by the same token.Needless to say, for any product or service, there are a lot more activities to consider, and not only the employment of a particular device. These varying activities which generally encounter a mark on cost are classified as "cost drivers". Cost drivers may appear in numerous varieties for instance machine hours consumed, number of inspections, hours spent on inspections, number of production runs, quantity of hours used up throughout production, quantity of setups, together with multiple others.In the case above, we simply used machine hours consumed. Inside a less forgiving example, we may additionally need to consider the number of inspections. Suppose Phone A solicited added inspections by enterprise engineers than Phone B? It goes without saying, a great deal more of the compensation of institution engineers really needs to be allocated to Phone A. Whereas, what if Phone B solicited a great deal more production runs than Phone A? Again, we would struggle to conveniently partition broad production costs among the two mobile phone types. To further complicate the problem, what if Phone A, irrespective of using far less production runs, solicited more production setups than Phone B? Evidently, the difficulty of appropriately allocating costs to each of the phone models can get incredibly exhausting. Having said that, this difficulty can be really worth the effort if it helps a business apply extra meticulous or more defined costs on items, which can be made use to help the company in its pricing methods. The beauty of Activity Based Costing is that it considers all these diverse costs and cost drivers in a timely fashion, granting an organization the competence to perform pretty defined costing inspite of such concerns. http://www.youtube.com/watch?v=PcjxRe4EsuY activity based costing, abc costing, what is activity based costing, what is abc http://mbabullshit.com/blog/activity-based-costing/
Views: 280865 MBAbullshitDotCom
FIFO Process Costing
 
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Views: 50548 UNFtannertown
Absorption Costing - Costs and Costing Techniques - Learn Accounting Online
 
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COSTS AND COSTING TECHINQUES The different elements of costs are materials, labour and expenses. The elements of costs can broadly be put into two categories. 1. Fixed costs 2. Variable costs Fixed cost are those which do not vary, but remain constant within a given period of time, inspite of fluctuations in production. The examples of fixed costs are rent, insurance charges, management salaries, etc. On the other hand, variable costs are those which vary in direct proportion to any change in the volume of output. The costs of direct material, direct wages etc, can be put into this category. The cost of a product can be ascertained by any of the following two costing techniques: 1. Absorption costing Technique 2. Marginal Costing Techigue Absorbtion costing technique is also termed as ''TRADITIONAL or FULL COST METHOD''. According to this method, the cost of a product is determined after considering both fixed and variable costs. The variable costs, such as those of direct materials, direct labour, etc. are directly charged to the products, while the fixed costs are approportioned on a suitable basis over different products, manufactured during a period. Thus, in the case of absorption costing, all costs are identified with the manufactured products. Advantages of absorption costing: It recognizes the importance of fixed costs in production. This method is accepted by Inland revenue, as stock is not undervalued. This method is always used to prepare financial accounts. When production remains constant, but sales fluctuate absorption costing will show less fluctuation in net profit. Unlike marginal costing, where fixed costs are agreed to change into variable cost, it is cost into the stock value, hence distorting stock valuation. Disadvantages of absorption costing: It assumes that prices are simply a function of costs. It does not take the account of demand. It includes past costs which may not be relevant to the pricing decision at hand. It does not provide information which aids decision-making in a rapidly changing market environment.As the manager's emphasis is on total cost, the cost-volume-profit relationship is ignored. The manager needs to use his intuition to make the decision.
Views: 58559 Alternate Learning
Product Costing System for the Pulp and Paper Industry
 
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EPS Product Cost Management is a powerful system that empowers pulp and paper companies to better control their production cost. This is done through excellent recipe and price management functionality supporting standard, actual and forward-looking costing.
Views: 1057 EPSCosting
Activity Based Costing (Part 1) Cost Pools and 1st Stage Allocation
 
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This video explains the process of activity-based costing. Using an example to illustrate the process, this video shows how to identify cost pools, assign costs to the costs pools in the first stage allocation, and calculate activity rates. Edspira is your source for business and financial education. To view the entire video library for free, visit http://www.Edspira.com To like us on Facebook, visit https://www.facebook.com/Edspira Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. The goal of Michael's life is to increase access to education so all people can achieve their dreams. To learn more about Michael's story, visit http://www.MichaelMcLaughlin.com To follow Michael on Facebook, visit https://facebook.com/Prof.Michael.McLaughlin To follow Michael on Twitter, visit https://twitter.com/Prof_McLaughlin
Views: 80509 Edspira
ABC Costing Allocation and product margin
 
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ABC Costing allocation of overhead and product margin
Views: 5914 Cheri Bergeron
ABC Costing - Unit, Batch, Product, Facility-Level Activities - Value vs Non-Value Added Costs vs
 
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Classifying Costs by Unit, Batch, Product, or Facility-Level Activities - Value vs Non-Value Added Costs - ABC Costing Benefits vs Costs.
Cost component structure in SAP Product Costing
 
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This video about how to create cost component structure in product costing. if you any queries you can send mail to my id:[email protected] /Call @ 9902312118.
Views: 13410 SAP FICO Vision
Absorption Costing vs. Variable Costing
 
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This video explains the difference between Absorption Cost and Variable Costing in the context of managerial accounting. The key functional difference between these two methods is the way in which fixed overhead is classified, and the video provides an example to illustrate how this difference leads to substantial discrepancies in the calculation of product costs, cost of goods sold, and profitability. The video then summarizes the benefits and drawbacks of Absorption Costing and Variable Costing. Edspira is your source for business and financial education. To view the entire video library for free, visit http://www.Edspira.com To like us on Facebook, visit https://www.facebook.com/Edspira Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. The goal of Michael's life is to increase access to education so all people can achieve their dreams. To learn more about Michael's story, visit http://www.MichaelMcLaughlin.com To follow Michael on Facebook, visit https://facebook.com/Prof.Michael.McLaughlin To follow Michael on Twitter, visit https://twitter.com/Prof_McLaughlin
Views: 116479 Edspira
Process Costing: Weighted Average Method
 
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70% Off the Complete Crash Course on Udemy: http://bit.ly/2Dhip74 In this lesson I'll be preparing a production report using the weighted average method. Make use of the template I provided and follow along as we complete the physical flow schedule, the number of equivalent units, cost per equivalent unit, COG completed/transferred out and a cost reconciliation. EDIT: I accidentally wrote physical units schedule instead of physical flow schedule. Sorry about that! Website: http://www.notepirate.com Follow us on Facebook: https://www.facebook.com/pages/Note-Pirate/514933148520001?ref=hl Follow us on Twitter: http://twitter.com/notepirate
Views: 6062 Notepirate
Stock accounting and product costing in Odoo inventory
 
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For more information, please refer to https://www.odoo.com To schedule a demo, please refer to https://www.odoo.com/r/demo-npouplard If you have any question, please send it to [email protected]
Views: 1155 Odoo
Standard Costs and Variance Analysis
 
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This video discusses the use of standard costs in Managerial Accounting. It also provides a comprehensive example to illustrate how standard costs are useful in calculating the price variance and quantity variance. Edspira is your source for business and financial education. To view the entire video library for free, visit http://www.Edspira.com To like us on Facebook, visit https://www.facebook.com/Edspira Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. The goal of Michael's life is to increase access to education so all people can achieve their dreams. To learn more about Michael's story, visit http://www.MichaelMcLaughlin.com To follow Michael on Facebook, visit https://facebook.com/Prof.Michael.McLaughlin To follow Michael on Twitter, visit https://twitter.com/Prof_McLaughlin
Views: 197423 Edspira
ACCT 1003 Product Costing ProcessCosting II Study Question 3
 
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This presentation demonstrates the costing of finished, unfinished (Ending WIP) and bad units in a Process Costing System.
Views: 7056 Joan Thomas-Stone
Cost Per Equivalent Unit (weighted average method)
 
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This video explains what equivalent units are in the context of managerial accounting and demonstrates how to calculate the cost per equivalent unit with an in-depth example. Edspira is your source for business and financial education. To view the entire video library for free, visit http://www.Edspira.com To like us on Facebook, visit https://www.facebook.com/Edspira Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. The goal of Michael's life is to increase access to education so all people can achieve their dreams. To learn more about Michael's story, visit http://www.MichaelMcLaughlin.com To follow Michael on Facebook, visit https://facebook.com/Prof.Michael.McLaughlin To follow Michael on Twitter, visit https://twitter.com/Prof_McLaughlin
Views: 177572 Edspira
ACCT 1003 Product Costing ProcessCosting I
 
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In this presentation we start exploring the second method of product costing - Process Costing. The presentation demonstrates the preparation of a simple process account with losses and the journalization of production costs. We conclude the presentation by looking at the concept of abnormal gain.
Views: 10879 Joan Thomas-Stone
Activity Based Costing
 
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Bob's business is growing with a wider product selection, but he is also facing increased competition. Bob is concerned his product costing system is no longer providing accurate information. Bob considers using activity based costing to allocate overheads.
Cost Per Equivalent Unit, FIFO Method, Part 1
 
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This video shows how to calculate the Cost Per Equivalent Unit using the FIFO Method. A comprehensive example is provided to demonstrate how the equivalent units of production and the cost per equivalent unit are computed. Edspira is your source for business and financial education. To view the entire video library for free, visit http://www.Edspira.com To like us on Facebook, visit https://www.facebook.com/Edspira Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. The goal of Michael's life is to increase access to education so all people can achieve their dreams. To learn more about Michael's story, visit http://www.MichaelMcLaughlin.com To follow Michael on Facebook, visit https://facebook.com/Prof.Michael.McLaughlin To follow Michael on Twitter, visit https://twitter.com/Prof_McLaughlin
Views: 86100 Edspira
Process Costing: FIFO Example | Managerial Accounting | CMA Exam | Ch 4 P 3
 
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Process costing is used when there is mass production of similar products, where the costs associated with individual units of output cannot be differentiated from each other. In other words, the cost of each product produced is assumed to be the same as the cost of every other product. Under this concept, costs are accumulated over a fixed period of time, summarized, and then allocated to all of the units produced during that period of time on a consistent basis. When products are instead being manufactured on an individual basis, job costing is used to accumulate costs and assign the costs to products. When a production process contains some mass manufacturing and some customized elements, then a hybrid costing system is used. Examples of the industries where this type of production occurs include oil refining, food production, and chemical processing. For example, how would you determine the precise cost required to create one gallon of aviation fuel, when thousands of gallons of the same fuel are gushing out of a refinery every hour? The cost accounting methodology used for this scenario is process costing. Process costing is the only reasonable approach to determining product costs in many industries. It uses most of the same journal entries found in a job costing environment, so there is no need to restructure the chart of accounts to any significant degree. This makes it easy to switch over to a job costing system from a process costing one if the need arises, or to adopt a hybrid approach that uses portions of both systems. Example of Process Cost Accounting As a process costing example, ABC International produces purple widgets, which require processing through multiple production departments. The first department in the process is the casting department, where the widgets are initially created. During the month of March, the casting department incurs $50,000 of direct material costs and $120,000 of conversion costs (comprised of direct labor and factory overhead). The department processes 10,000 widgets during March, so this means that the per unit cost of the widgets passing through the casting department during that time period is $5.00 for direct materials and $12.00 for conversion costs. The widgets then move to the trimming department for further work, and these per-unit costs will be carried along with the widgets into that department, where additional costs will be added. Types of Process Costing There are three types of process costing, which are: Weighted average costs. This version assumes that all costs, whether from a preceding period or the current one, are lumped together and assigned to produced units. It is the simplest version to calculate. Standard costs. This version is based on standard costs. Its calculation is similar to weighted average costing, but standard costs are assigned to production units, rather than actual costs; after total costs are accumulated based on standard costs, these totals are compared to actual accumulated costs, and the difference is charged to a variance account. First-in first-out costing (FIFO). FIFO is a more complex calculation that creates layers of costs, one for any units of production that were started in the previous production period but not completed, and another layer for any production that is started in the current period. There is no last in, first out (LIFO) costing method used in process costing, since the underlying assumption of process costing is that the first unit produced is, in fact, the first unit used, which is the FIFO concept. Why have three different cost calculation methods for process costing, and why use one version instead of another? The different calculations are required for different cost accounting needs. The weighted average method is used in situations where there is no standard costing system, or where the fluctuations in costs from period to period are so slight that the management team has no need for the slight improvement in costing accuracy that can be obtained with the FIFO costing method. Alternatively, process costing that is based on standard costs is required for costing systems that use standard costs. It is also useful in situations where companies manufacture such a broad mix of products that they have difficulty accurately assigning actual costs to each type of product; under the other process costing methodologies, which both use actual costs, there is a strong chance that costs for different products will become mixed together. Process costing, equivalent units of production, FiFO method, weighted average, conversion cost flow of costs, cost accounted for, cpa exam, managerial accounting, raw materials, job order costing, work in process, processing departments, transferred-in cost, transferred out cost
Activity Based Costing (Overview Of ABC System Overhead Allocation Based On Resource Consumption )
 
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Activity Based Costing overview of what ABC costing is, Activity Based Costing is used to produce more accurate product costs than those obtained in the Traditional Cost systems (ABC is Based On Amount of Resources Used), Resource Consumption Model, Logic behind ABC Costing, 1-Products Consume Activities, 2-Activities Consume Resources, 3-Resources Generate Costs, What creates the demand for the output of each of the company's main activities ??, Allocate On Amount Used By Product, 1-Activities are identified, 2-Costs are traced to these activities (Activity Cost Pools) based on resources provided (Traced by Resource Driver),3-Costs are traced from each Activity Cost Pool to products (services) based on demands that each product (or service) has for each activity (Traced by Activity Drivers), A key idea in ABC is to find an activity measure for each activity that is closely related (correlated) to the activity costs involved (then applied to Product), detailed discussion by Allen Mursau
Views: 2464 Allen Mursau
Food Product Cost & Pricing Tutorial
 
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Step-by-step directions on how to use the Small Food Business Food Product Cost & Pricing Spreadsheet tool to determine accurate product costs and create a profitable multi-channel pricing strategy.
Views: 198846 Small Food Business
Management Accounting Job Order Journal Entries (Cost Accounting Tutorial #25)
 
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Full Crash Course on Udemy for $9.99! http://bit.ly/2DfGBXu After going over the Cost of Goods Manufactured Statement we'll learn how to record journal entries for the usage of direct materials, incurring direct labor and overhead costs, along with transferring inventories. Overhead applied and overhead incurred are tricky, so pay attention specifically to that part! Website: http://www.notepirate.com Follow us on Facebook: https://www.facebook.com/pages/Note-Pirate/514933148520001?ref=hl Follow us on Twitter: http://twitter.com/notepirate We appreciate all of the support you guys have given us. Be apart of the mission to help us reach more students by subscribing, thumbs upping and adding the videos to your favorites! ** Notepirate is privately owned and exclusive to Notepirate.com.**
Views: 31905 Notepirate

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