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Cost Accounting: Decision Making

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Cost Accounting: Decision Making

This course is part of Cost Accounting Specialization

Instructors: Gunther Friedl

11,696 already enrolled

Included with

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3 modules

Gain insight into a topic and learn the fundamentals.

137 reviews

Intermediate level

Recommended experience

Flexible schedule

8 hours to complete

Learn at your own pace

93%

Most learners liked this course

3 modules

Gain insight into a topic and learn the fundamentals.

137 reviews

Intermediate level

Recommended experience

Flexible schedule

8 hours to complete

Learn at your own pace

93%

Most learners liked this course

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

Shareable certificate

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Assessments

21 assignments

Taught in English

91%

of learners achieved a positive career outcome

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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.

Learn new concepts from industry experts
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?

Module details

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

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

Repeat CVPA15 minutes
CVPA in a company with two products12 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

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.