Cost Accounting

Cost accounting or managerial accounting matches the respective detail costs to a job or function to help management determine actual against a standard. If properly enacted, the program provides a continuous positive feedback loop to maximize profits for the division or company.

Job Costing Reports – Introduction (Part 1)

Job Cost Reports

Job costing reports are management tools used to evaluate project or production performance against a known or estimated standard.   They are used in many business sectors and their respective industries.   The primary purpose of job costing reports is to identify discrepancies or beneficial results, usually in the form of financial values.   They can be used to report both financial and numerical production outcomes.

Class Accounting With QuickBooks

Class Accounting

Class accounting is one of the options available with QuickBooks software.   Most accountants and bookkeepers misunderstand its purpose and how to properly implement this wonder tool of accounting.   If you are considering using class accounting and want to have a full comprehensive understanding, this is the article for you. 

Cost Codes – Subset of Item Codes

Cost Codes

Cost codes are unique identifiers assigned to items in an inventory sold individually or as a part of an assembly. The goal is to track the final outcome of the item(s) sold against the original estimated cost of the item. It is used in both financial and cost accounting.

Bookkeeping – Cost Accounting (Lesson 77)

Cost Accounting

The science of calculating the actual costs of manufacturing is known as cost accounting, a.k.a managerial accounting.  Unlike traditional accounting which records economic transactions after they occur, cost accounting identifies all underlying costs associated with the production of a single unit.

House Flipping – Business Dynamics

Flipping Houses

There is a lot of misinformation about flipping real estate on the internet and on television.  I’m mostly shocked by the lack of detailed information related to the entire cost of the project and the adjusted sales price.  I have yet to read a single article that goes into the details of the business dynamics of flipping houses.

Variable Costs

Variable Costs

Variable costs are those business related expenditures that vary in proportion to production.  The most common examples of variable costs include raw materials, labor, packaging and distribution expenses related to producing and delivering the product or service.

Fixed Costs – Explanation and Examples

Fixed Costs

‘Fixed costs’ is a business term used mostly in cost accounting.  It has several meanings based on its usage.  The most common definition associated with fixed costs is expenses that must be paid regardless of production or sales volume.  The best example is rent for a company.  It doesn’t matter whether you produce or sell one widget or several thousand, the rent must still be paid.

So why is it important to understand fixed costs?  How is it used in cost accounting and in financial reporting?  Finally, what are examples of fixed costs? 

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