Kenneth W. Boyd - Cost Accounting For Dummies

9 Part 5: Considering Quality Issues Chapter 17: What a Waste! Getting the Most from Spoilage, Scrap, and Reworked Products Accounting for Waste Applying Process Costing Methods to Spoilage Job Costing for Spoilage, Reworked Products, and Scrap Chapter 18: Making Smart Ordering Decisions Considering the Costs of Inventory Calculating Inventory Quantity with the Economic Order Quantity Formula Figuring a Favorable Reorder Point Evaluating Prediction Error Practicing Just-In-Time Purchasing SCM and Customer Demand Issues Chapter 19: Quality: Building a Better Mousetrap Considering Quality Benefits and Costs Compiling a Cost of Quality Report Putting Quality Practices in Place Customer Satisfaction: Measuring and Improving It Doing More in Less Time Eliminating the Constraint of the Bottleneck

10 Part 6: The Part of Tens Chapter 20: Ten Common Costing Mistakes and How to Avoid Them Pricing a Product Incorrectly Listing Fixed Costs As Variable Costs Labeling Period Costs As Product Costs Misusing Target Net Income Forgetting About Taxes Assigning Costs to the Wrong Product Not Reviewing Variances Correctly Redlining: Pushing Production Activity Above Relevant Range Ignoring the Timing of Costs Not Implementing Activity-Based Costing Chapter 21: Ten Ways to Increase Profits Using Costing Selling More Of The Right Products Implementing Sales Mix Analysis to Increase Total Profits Building a Higher Margin of Safety Deciding How Much You Need: Production and Scheduling Issues Who Does What: Handling Costs and Employee Issues Reducing and Managing Scrap Moving It off the Shelf: Inventory Issues Effectively Taking Special Orders Making Accurate Cost Allocations Addressing the Issue of Spoilage

11 Index

12 About the Author

13 Connect with Dummies

14 End User License Agreement

1 Chapter 2 TABLE 2-1: Fixed and Variable Costs TABLE 2-2: Fixed and Variable Costs, Direct and Indirect Costs — Examples

2 Chapter 4 TABLE 4-1 Job Cost Sheet — Johnson Fence Job TABLE 4-2 Normal Job Cost Sheet — Landscaping Job TABLE 4-3 Control Accounts for Inventory

3 Chapter 5 TABLE 5-1 Order Manager — Monthly Hours Per CustomerTABLE 5-2 Windshield Direct CostsTABLE 5-3 Indirect Cost Activities — Windshield Production and InstallationTABLE 5-4 Cost Allocation RatesTABLE 5-5 Cost Allocation as a Percentage of Total HoursTABLE 5-6 Total Costs By Type — Sedan and Van WindshieldsTABLE 5-7 Flower Bed and Lawn Care CostsTABLE 5-8 Costs and Profit by Product — Flower Bed and Lawn CareTABLE 5-9 Activity-Based Costing by Product — Flower Bed and Lawn CareTABLE 5-10 Calculating a New Sale Price for Flower Beds

4 Chapter 6TABLE 6-1 Garage Door Production BudgetTABLE 6-2 Garage Door Cost of Goods Sold BudgetTABLE 6-3 Gift Shop Cash Budget — Month of MarchTABLE 6-4 Gift Shop Budgeted Statement of Cash FlowsTABLE 6-5 Budgeted Balance SheetTABLE 6-6 Budgeted Income Statement

5 Chapter 7TABLE 7-1 Toy Manufacturer — Static BudgetTABLE 7-2 Toy Manufacturer — Actual ResultsTABLE 7-3 Toy Manufacturer — Static Budget VarianceTABLE 7-4 Toy Manufacturer — Revenue and Cost VarianceTABLE 7-5 Toy Manufacturer — Sales Volume VarianceTABLE 7-6 Material Price Variance — Aluminum for BikesTABLE 7-7 Material Efficiency Variance — Aluminum for BikesTABLE 7-8 Labor Price Variance — Labor Hours for LampsTABLE 7-9 Labor Efficiency Variance — Labor Hours for LampsTABLE 7-10 Glass Bottles — Labor Cost Allocation by BatchTABLE 7-11 Glass Bottles — Flexible Budget CalculationTABLE 7-12 Glass Bottles — Labor Price VarianceTABLE 7-13 Glass Bottles — Labor Efficiency Variance

6 Chapter 8TABLE 8-1 Budgeted Fixed Overhead — Applied to Actual OutputTABLE 8-2 Budgeted Variable Overhead — Applied to Actual Output

7 Chapter 9TABLE 9-1 Rubber Mallet — Inventory Purchases and SalesTABLE 9-2 FIFO Method — Cost of SalesTABLE 9-3 LIFO Method — Cost of SalesTABLE 9-4 Profit on 100 Units Sold — FIFO and LIFOTABLE 9-5 Profit on 225 Units Sold — FIFO and LIFOTABLE 9-6: Total Profit- FIFO and LIFOTABLE 9-7 Year 1 Production — Sales and CostsTABLE 9-8: Year 1 Profit — Variable Versus Absorption CostingTABLE 9-9 Year 2 Production — Sales and CostsTABLE 9-10 Year 2 Profit — Variable Versus Absorption Costing

8 Chapter 11TABLE 11-1 Machine Purchase Decision — ComparisonTABLE 11-2 Towel Company — Before Special OrderTABLE 11-3 Towel Company — Special-Order ProposalTABLE 11-4 “Make” Decision – Continue ProductionTABLE 11-5 “Buy” Decision — Outsource ProductionTABLE 11-6 Closing a Division — Financial ImpactTABLE 11-7 Carrying Cost Decision — Candle PurchasesTABLE 11-8 Product Mix — Contribution Margin Per HourTABLE 11-9 Product Mix — Actual Production

9 Chapter 12TABLE 12-1 Baseball Glove Company — Before Special OrderTABLE 12-2 Baseball Glove Company — After Special OrderTABLE 12-3 Lawn Mower Company — Target Price and Target Cost

10 Chapter 13TABLE 13-1 Cost Hierarchies and Cost Allocation BasesTABLE 13-2 Income Statement — No Division AllocationTABLE 13-3 Catering Business — Isolated Costs and ActivitiesTABLE 13-4 Catering Business — December Profit by ClientTABLE 13-5 Budgeted Contribution Margin in DollarsTABLE 13-6 Actual Contribution Margin in DollarsTABLE 13-7 Sales Mix VarianceTABLE 13-8 Sales Quantity Variance

11 Chapter 14TABLE 14-1 IT Department — Budgeted Cost PoolTABLE 14-2 IT Department — Applied Cost PoolTABLE 14-3 Dual Rate Allocation — Total Budgeted Fixed CostTABLE 14-4 Dual Rate Allocation — Total Variable CostTABLE 14-5 Marketing Support — Budgeted Cost PoolTABLE 14-6 Marketing Support — Budget with Practical CapacityTABLE 14-7 Shipping Department — Fixed Cost Allocation, Previous YearTABLE 14-8 Fixed Cost Allocation — Current Year (1,200 Actual Commercial Hours)TABLE 14-9 Direct Cost Allocation ExampleTABLE 14-10 Step-down Allocation ExampleTABLE 14-11 Stand-alone Cost Allocation Method

12 Chapter 15TABLE 15-1 Joint Cost — Relative Sales Value at SplitoffTABLE 15-2 Joint Cost — Physical Measure at SplitoffTABLE 15-3 Joint Cost — Net Realizable Value CalculationTABLE 15-4 Joint Cost — NRV Cost CalculationTABLE 15-5 Goods Available For Sale by ProductTABLE 15-6 Joint Cost AllocationTABLE 15-7 Verifying Gross Margin PercentageTABLE 15-8 Cost Allocation — Less Heavy Duty Separable Costs

13 Chapter 16TABLE 16-1 Equivalent Units — Physical Flow of Units (April)TABLE 16-2 Candy — Physical Flow of Units (September)TABLE 16-3 Equivalent Units of ProductionTABLE 16-4 Assignment of CostsTABLE 16-5 Shoe Company Physical Flow of Units (November)TABLE 16-6 Shoe Company — Equivalent Units of ProductionTABLE 16-7 Shoe Company — Cost Per Equivalent UnitTABLE 16-8 Shoe Company — Assignment of CostsTABLE 16-9 Tie Company — Cost Assigned to January Ending WIP (100 Physical Units...TABLE 16-10 Tie Company — Physical Flow of Units (February)TABLE 16-11 Tie Company — Equivalent Units of ProductionTABLE 16-12 Tie Company — Cost Per Equivalent UnitTABLE 16-13 Tie Company — Assignment of CostsTABLE 16-14 FIFO Method — Physical Flow of Units (February)TABLE 16-15 FIFO Method — Equivalent Units of Production

14 Chapter 17TABLE 17-1 Equivalent Units — Spoiled Units IncludedTABLE 17-2 Equivalent Units — Spoiled Units ExcludedTABLE 17-3 Weighted Average — Physical Flow of Units (May)TABLE 17-4 Weighted Average — Equivalent Units (May)TABLE 17-5 FIFO — Physical Flow of Units (May)TABLE 17-6 FIFO — Equivalent Units (May)

15 Chapter 18TABLE 18-1 Current Purchasing Costs versus JIT Purchasing CostsTABLE 18-2 JIT Purchasing Costs with Stockouts and Returns

1 Chapter 4FIGURE 4-1: The flow of manufacturing costs.

2 Chapter 10FIGURE 10-1: Linear function. FIGURE 10-2: Slope co-efficient.