Aunt Connie's
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Cost Accounting
Cost Accounting
Elizabeth Shaw
March 2, 2010
ACC561
John Triplett
University of Phoenix
Cost Accounting
Maria Villanueve founded Aunt Connie’s cookies in 1986. Over the years the Aunt Connie’s cookie brand has grown. The most popular flavors of cookies are lemon crème and real mint. Aunt Connie’s is a family owned business and solely owned by Maria Villanueve. Recently Maria has faced some critical decisions:
• Make or buy products
• Sell or process further
• Eliminate an unprofitable business segment
• The allocation of limited resouces
Cost accounting is one type of accounting system Maria should investigate as a means to helping make critical decisions. By understanding what cost accounting is, it will better prepare her to make critical decisions. The following paper will explain how cost accounting works.
Cost Accounting System (CAS)
Cost accounting is a type of accounting system that captures production costs by assessing the cost of each step of a production process along with associated fixed costs. Cost accounting measures and records cost individually, comparing input and output results to assist a company in measuring financial performance. A CAS has five parts:
1. Input measurement basis.
2. Inventory valuation method.
3. Cost accumulation method.
4. Cost flow assumption.
5. Capability of recording inventory, cash flows at certain intervals (Investopedia, n.d.).
Several different cost accounting systems exist, this is nice since you can combine the different systems and use them in different combinations, but you have to remember not all the alternatives are compatible.
The cost accounting base begins with a type of cost that would flow into and through the inventory accounts. Four types of costing flow through inventory accounts:
1. Pure historical costing: The system captures only historical costs. This refers to...
Cost Accounting
Elizabeth Shaw
March 2, 2010
ACC561
John Triplett
University of Phoenix
Cost Accounting
Maria Villanueve founded Aunt Connie’s cookies in 1986. Over the years the Aunt Connie’s cookie brand has grown. The most popular flavors of cookies are lemon crème and real mint. Aunt Connie’s is a family owned business and solely owned by Maria Villanueve. Recently Maria has faced some critical decisions:
• Make or buy products
• Sell or process further
• Eliminate an unprofitable business segment
• The allocation of limited resouces
Cost accounting is one type of accounting system Maria should investigate as a means to helping make critical decisions. By understanding what cost accounting is, it will better prepare her to make critical decisions. The following paper will explain how cost accounting works.
Cost Accounting System (CAS)
Cost accounting is a type of accounting system that captures production costs by assessing the cost of each step of a production process along with associated fixed costs. Cost accounting measures and records cost individually, comparing input and output results to assist a company in measuring financial performance. A CAS has five parts:
1. Input measurement basis.
2. Inventory valuation method.
3. Cost accumulation method.
4. Cost flow assumption.
5. Capability of recording inventory, cash flows at certain intervals (Investopedia, n.d.).
Several different cost accounting systems exist, this is nice since you can combine the different systems and use them in different combinations, but you have to remember not all the alternatives are compatible.
The cost accounting base begins with a type of cost that would flow into and through the inventory accounts. Four types of costing flow through inventory accounts:
1. Pure historical costing: The system captures only historical costs. This refers to...