PBL: Cost Accounting
Competency: Role of the Management Accountant & Comparing Cost, Management and Financial Accounting
Tasks
1.
Explain how managerial accounting applies to all types of industries (e.g., merchandising, manufacturing, nonfinancial
services, financial services, government, and other nonprofit entities).
2.
Discuss the need for and uses of a management control system and how accounting information facilitates control.
3.
Explain and differentiate the purposes of cost accounting, management accounting, and financial accounting.
4.
Explain the importance of financial and nonfinancial information for planning, control, and decision-making purposes.
5.
Understand the importance of unit costs for both financial and management decision making.
6.
Describe how cost accounting fits into an organization’s structure.
7.
Illustrate the process of determining and setting standard costs.
8.
Explain why different ways of computing product costs are appropriate for different purposes.
9.
Discuss the need for professional ethics in the performance of management accounting.
Competency: Cost Accounting Concepts, Principles, Terminology
Tasks
1.
Describe the variety of cost units, cost centers, and profit centers.
2.
Understand the nature and purpose of cost classification.
3.
Describe the techniques for cost accumulation.
4.
Differentiate between direct and indirect costs; fixed and variable costs; period and product costs; controllable and
uncontrollable costs; avoidable and unavoidable costs; etc.
5.
Identify cost classification for decision-making and planning.
6.
Understand cost behavior patterns including linear and step functions.
7.
Define margin of safety.
8.
Demonstrate the standard cost accounting cycle.
9.
Identify the key features of a standard costing system.
10. Define standard cost variances for a variety of applications.
11. Define cost behavior.
12. Define and illustrate a cost object.
13. Distinguish between direct costs and indirect costs.
14. Define cost volume profit analysis.
15. Distinguish between fixed and variable overhead costs.
16. Explain the flow and accumulation of costs when using job costing.
17. Describe the purpose and content of a job cost sheet.
18. Explain the elements that make up manufacturing costs.
Competency: Using Accounting Information To Make Decisions
Tasks
1.
Distinguish between fixed costs, variable costs, and mixed costs by categorizing various costs of an entity into these three
categories.
2.
Explain the usefulness and discuss the limitations of Cost-Volume-Profit (CVP) analysis as a decision-making tool.
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PBL: Cost Accounting
3.
Understand a cost volume profit (CVP) graph and explain the significance of the components illustrated.
4.
Explain how pricing decisions are made, including transfer pricing decisions.
5.
Identify the relevant costs in a make-or-buy decision and discuss both the qualitative and quantitative factors considered in
this decision.
6.
Understand how cost accounting information is used to make and communicate long-term strategic decisions needed to
position the firm for competitive advantage.
7.
Analyze semi-variable factory overhead costs.
8.
Understand a budget of factory overhead costs.
9.
Apply factory overhead to production.
10. Apply accounting rules for actual and applied factory overhead.
11. Understand the process of determining and setting standard costs.
Competency: Materials and Labor Costs in a Cost Accounting System
Tasks
1.
Describe materials control and material control procedures.
2.
Apply accounting principles to the accounting for materials.
3.
Define what is meant by scrap, spoiled goods, and defective work.
4.
Describe just-in-time materials control.
5.
Describe the nature of and purposes of wages plans.
6.
Explain the procedures used to control labor cost.
7.
Apply cost accounting principles to the accounting for labor.
8.
Discuss the need for and the procedure for payroll accrual.
9.
Describe the special labor cost problems that exist and how accounting can help to solve them.
Competency: Measurement and Presentation
Tasks
1.
Prepare journal entries for standard cost application.
2.
Compute break-even point.
3.
Calculate fixed and variable costs, contribution margin, contribution margin ratio, break-even point in sales dollars and
units, and target sales volume in dollars and units.
4.
Calculate residual income (RI) and explain how the method is used.
5.
Calculate return on investment (ROI) and explain how the method is used.
6.
Calculate the effects of changes in sales volume, sales price, variable costs and/or fixed costs on company contribution
margin, break-even point, and operating income for both multi-product and single-product situations.
7.
Calculate and explain contribution margin and contribution margin ratio.
8.
Calculate the sales volume required to earn a desired level of operating income.
9.
Explain the purposes of break-even analysis.
10. Determine the margin of safety.
11. Calculate standard cost variances for a variety of applications.
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PBL: Cost Accounting
Competency: Measurement, Valuation, Realization/Recognition
Tasks
1.
Measure inventory valuation based on alternative valuation methods.
2.
Apply the concept of present value to market value of bonds.
3.
Define the future and present value of money.
4.
Compute the present value and future value for a series of future cash flows.
5.
Compute the premium or discount associated with a bond issue.
6.
Evaluate alternatives related to a capital investment situation.
7.
Determine relevant cash inflows and outflows in applying discounted cash flow methods.
8.
Evaluate investments using the payback methods, the discounted rate of return, and the net present value method.
9.
Explain the realization concept.
10. Assign values to a transaction and/or event.
11. Summarize the value for a specific transaction in a given time period.
12. Calculate financial strength analysis by determining current ratio of assets to liabilities, acid-test ratio, debt ratio, working
capital, equity ratio, and equity and earnings per share.
13. Apply differential analysis to make decisions such as buying or making a product; leasing or buying an asset; discontinuing
a department, plant, or product; replacing or repairing equipment; or offering discounted prices on special orders.
14. Use other financial analysis tools, such as trend analysis, common-size statements, etc.
15. Calculate business profitability.
16. Explain and illustrate various depreciation issues including partial year depreciation, extraordinary repairs, fully depreciated
assets, and switching depreciation methods.
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PBL: Cost Accounting
References:
AAT Examination Knowledge Requirements. Accredited Accounting Technicians.
ACC215 Cost Accounting - Administration Outline. Mercer County Community College, West Windsor, NJ.
ACCT 2302 – Managerial Accounting, 2013. Dr. Steven Hall, Texas A&M University-Corpus Christi, TX.
ACCT 3314 – Cost Accounting, 2013. Dr. Awni Zebda, Texas A&M University-Corpus Christi, TX.
ACCT 5351 – Strategic Cost Management, 2013. Dr. Awni Zebda, Texas A&M University-Corpus Christi, TX.
Managerial Accounting Outcomes with Core Competencies. Bay Path College, Longmeadow, MA.
National Business Education Standards. National Business Education Association. Reston, VA.
The Manager's Guide to the Cost Accountant Role. Salaries for Business.com.
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