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    Full Costs and Their Uses GROUP2

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    Stephanie Ann Marie Dueñas
    The document discusses full costs and their uses. It defines key cost concepts like cost object, direct costs, indirect costs, and full cost. It also outlines elements of product costing like direct labor cost, overhead cost, and conversion cost. The document discusses product costing systems and how they accumulate and report costs. It notes several uses of full costs, including financial reporting, analyzing profitability, setting regulated prices, and different product pricing strategies. It concludes by introducing a case study on Lipman Bottle Company to demonstrate cost accounting concepts.

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    Full Costs and Their Uses GROUP2

    Uploaded by

    Stephanie Ann Marie Dueñas
    22 views15 pages
    The document discusses full costs and their uses. It defines key cost concepts like cost object, direct costs, indirect costs, and full cost. It also outlines elements of product costing like direct labor cost, overhead cost, and conversion cost. The document discusses product costing systems and how they accumulate and report costs. It notes several uses of full costs, including financial reporting, analyzing profitability, setting regulated prices, and different product pricing strategies. It concludes by introducing a case study on Lipman Bottle Company to demonstrate cost accounting concepts.

    Original Description:

    MBM - Cost Accounting

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    The document discusses full costs and their uses. It defines key cost concepts like cost object, direct costs, indirect costs, and full cost. It also outlines elements of product costing like direct labor cost, overhead cost, and conversion cost. The document discusses product costing systems and how they accumulate and report costs. It notes several uses of full costs, including financial reporting, analyzing profitability, setting regulated prices, and different product pricing strategies. It concludes by introducing a case study on Lipman Bottle Company to demonstrate cost accounting concepts.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    22 views15 pages

    Full Costs and Their Uses GROUP2

    Uploaded by

    Stephanie Ann Marie Dueñas
    The document discusses full costs and their uses. It defines key cost concepts like cost object, direct costs, indirect costs, and full cost. It also outlines elements of product costing like direct labor cost, overhead cost, and conversion cost. The document discusses product costing systems and how they accumulate and report costs. It notes several uses of full costs, including financial reporting, analyzing profitability, setting regulated prices, and different product pricing strategies. It concludes by introducing a case study on Lipman Bottle Company to demonstrate cost accounting concepts.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 15

    FULL COSTS AND

    THEIR USES

    CASE:

    LIPMAN BOTTLE
    COMPANY

    OUTLINE
    COST CONCEPTS
    PRODUCT COSTING SYTEMS
    USES OF FULL COSTS
    CASE: LIPMAN BOTTLE CO.

    COST IS A MEASUREMENT, IN
    MONETARY TERMS, OF THE AMOUNT OF
    RESOURCES USED FOR SOME PURPOSE
    IMPORTANT IDEAS
    Cost measures the use of resources.
    Cost measurements are expressed in monetary
    terms.
    Cost measurement always relates to a purpose.

    COST OBJECT
    The technical name for the product, project, organizational unit,
    or other activity or purpose for which costs are measure.

    FULL COST
    All the resources used for a cost object.
    The full cost of a cost object is the sum of its direct costs plus a
    fair share of applicable indirect costs.

    ITEMS OF COST
    Direct Cost

    The direct costs of a cost object are items of costs that are
    specifically traced to,or caused by, that cost object.

    Indirect Cost

    Indirect costs are elements of costs that are associated with, or


    caused by, two or more cost objects jointly but that are not directly
    traced to each of them individually

    ELEMENTS OF PRODUCT
    COST

    DEFINITION OF TERMS
    Direct Labor Cost - The labor quantities that can be specifically
    identified with a cost object in an economically feasible manner,
    priced at a unit price of direct labor
    Overhead cost - All indirect production costsall production
    costs other than direct costs
    Direct material cost - The quantities of material that can be
    specifically identified with a cost object in an economically feasible
    manner, priced at the unit price of direct material
    Conversion cost - The sum of direct labor cost and overhead
    cost
    Full production cost - The sum of direct material cost and
    conversion cost
    Nonproduction costs - also called period costs all costs incurred
    in an organization other than inventory costs eg. Selling, general
    and administrative cost.
    Full Cost - product is simply the sum of all the cost elements

    PRODUCT COSTING
    SYSTEMS
    The system that accumulates and reports costs of product cost
    objects.

    ACCOUNT FLOWCHART
    - helpful in understanding the flow of costs through a cost
    accounting system

    ACQUISITION
    PRODUCTION
    SALE

    USES OF FULL COST


    FINANCIAL REPORTING

    ANALYSIS OF PROFITABILITY
    ANSWERING THE QUESTION WHAT DID IT COST?
    SETTING REGULATED PRICES
    PRODUCT PRICING
    NORMAL PRICING
    TIME AND MATERIAL PRICING
    CONTRIBUTION PRICING

    CASE: LIPMAN BOTTLE


    COMPANY

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