Cost Accounting: Decision Making

Cost Accounting: Decision Making

This course is part of Cost Accounting Specialization

Instructors: Gunther Friedl

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3 modules

Gain insight into a topic and learn the fundamentals.

Intermediate level

Recommended experience

8 hours to complete

Flexible schedule

Learn at your own pace

3 modules

Gain insight into a topic and learn the fundamentals.

Intermediate level

Recommended experience

8 hours to complete

Flexible schedule

Learn at your own pace

What you'll learn

You will learn methods that help to figure out how costs will behave if you adjust produced or sold quantities.
You will learn how cost information can support business decisions best.
You will learn to distinguish costs that are relevant for business decisions from costs that are irrelevant.

Skills you'll gain

Details to know

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Assessments

21 assignments

Taught in English

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Build your subject-matter expertise

This course is part of the Cost Accounting Specialization

When you enroll in this course, you'll also be enrolled in this Specialization.

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Gain a foundational understanding of a subject or tool
Develop job-relevant skills with hands-on projects
Earn a shareable career certificate

There are 3 modules in this course

In the third course, you will learn how to use information from cost accounting to improve managerial decision-making. We discuss business decisions and suggest how cost information can support them best. For example, how will costs change if managers adjust cost drivers? How many units do companies need to sell in order to avoid losses or to achieve a targeted profit? How can managers improve pricing or product programs with information from cost accounting?

Cost accountants want to support decision making. To do so, they should not only calculate current costs and income, but they should also be able to tell managers how costs might change depending on managers' decisions. "How would costs change if we produced more or less products? How would they change if we produce more or less variants of products? How would they change if we increase the quality of our products?" Cost functions help to answer these questions and in this module, we make you familiar with them. First, we show you some typical cost functions and, second, we introduce a variety of methods that cost accountants can use to determine cost functions. Finally, we show you how accountants can document cost forecasts.

What's included

8 videos6 readings5 assignments2 plugins

8 videosTotal 42 minutes

Introduction to the Technical University of Munich 3 minutes
Elementary cost functions4 minutes
Combinations of elementary cost functions5 minutes
Cost function, cost drivers, and the time horizon5 minutes
Simplifying cost functions and the relevant range5 minutes
Analytical methods2 minutes
Statistical methods11 minutes
Documenting cost forecasts6 minutes

6 readingsTotal 79 minutes

Course Overview2 minutes
Introduce yourself!10 minutes
Lecture slides for this course2 minutes
Outlook: How to apply ‘sticky costs’ in advisory services10 minutes
Practical example: Statistical cost determination in a hospital10 minutes
Deriving and visualizing cost functions in Excel45 minutes

5 assignmentsTotal 35 minutes

Identifying typical cost functions5 minutes
Determining cost functions6 minutes
Calculating planned cost-allocation rates4 minutes
Statistical methods for determining cost functions10 minutes
Documenting cost forecasts for varying capacity levels10 minutes

2 pluginsTotal 30 minutes

Identification of cost-behavior patterns15 minutes
Test your understanding15 minutes

When companies consider offering a new product, they might want to know how many units they need to sell in order to avoid losses or to achieve a targeted profit. Cost-volume profit analysis is a simple tool that helps answer these questions. It illustrates how costs, revenues, and profits depend on sold quantities.

What's included

9 videos1 reading10 assignments1 plugin

9 videosTotal 40 minutes

Objectives of cost-volume profit analysis3 minutes
CVPA for a single product8 minutes
Considering target profits in CVPA 5 minutes
Cost-volume profit analyses for multiple products6 minutes
Cost-volume profit analyses with a constant sales mix4 minutes
Assumptions of cost-volume profit analysis3 minutes
Sensitivity analysis4 minutes
Margin of safety percentage3 minutes
Insourcing versus outsourcing4 minutes

1 readingTotal 2 minutes

Operating leverage2 minutes

10 assignmentsTotal 91 minutes

Introduction to cost-volume profit analysis4 minutes
CVPA for a single product6 minutes
CVPA and target profits9 minutes
CVPA for multiple products10 minutes
Cost-volume profit analysis10 minutes
CVPA with uncertain input parameters5 minutes
Case study: RFID labels 15 minutes
CVPA and cost-structure flexibility5 minutes
Repeat CVPA15 minutes
CVPA in a company with two products12 minutes

1 pluginTotal 10 minutes

Test your understanding10 minutes

In the beginning of this course, you learned that companies use Cost Accounting to support managers' decision-making. In this module, we outline some business decisions and discuss how cost information can support them best. For example, we discuss pricing decisions and product-mix decisions under capacity constraints.

What's included

11 videos4 readings6 assignments1 plugin

11 videosTotal 45 minutes

The decision making process3 minutes
Planning objects, horizon, objectives and constraints4 minutes
Quantitative and qualitative information4 minutes
Characteristics of decisions under uncertainty2 minutes
Requirements for information from accounting1 minute
Sunk costs, opportunity costs and operative decisions3 minutes
The effects of using full-cost information5 minutes
Determining the optimal product mix11 minutes
Price setter vs. price taker2 minutes
Lower price limits for negotiations and tenders7 minutes
Long-term pricing decisions3 minutes

4 readingsTotal 35 minutes

Deep dive: Opportunity costs in medical treatments10 minutes
Absorption costing and make-or-buy decisions10 minutes
More on outsourcing and offshoring5 minutes
What do I learn in the other courses of the Specialization?10 minutes

6 assignmentsTotal 71 minutes

The decision making process for operative decisions10 minutes
Opportunity and sunk costs10 minutes
Choosing the optimal product mix5 minutes
Basics of pricing decisions6 minutes
Pricing decisions10 minutes
Product-mix decision at Bryan's Bakery30 minutes

1 pluginTotal 15 minutes

Test your knowledge: Flash cards 15 minutes

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Instructors

Gunther Friedl

Technical University of Munich (TUM)

4 Courses37,153 learners

Offered by

Technical University of Munich (TUM)

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