tailieunhanh - Management accounting: Information for creating and managing value (4/e): Chapter 4 - Kim Langfield-Smith, Helen Thorne

Chapter 4 "Product costing systems". Learning objectives of this chapter include: Product costing systems, different product costs for different purposes, designing product costing systems, flow of costs in manufacturing businesses, allocating overhead costs to products,. | Chapter 4 Product costing systems 4- Product costing Product costing systems Accumulate product-related costs and use procedures to assign them to the final products In some businesses, upstream and downstream costs are regarded as product related Upstream costs—research and development, product design, supply Downstream costs—marketing, distribution, customer service Product costs are the input to the product costing system 4- 4- Different product costs for different purposes Product costs can include upstream, manufacturing and downstream costs Inclusion of various costs depends on the timeframe and type of decision to be made Managers’ needs for product cost information will vary depending on the type of decision to be made and managers’ personal preferences continued 4- Different product costs for different purposes Cost for inventory valuation for external reporting must include only manufacturing costs For long-term decisions about products, a wider definition may be used Product costs are used to value inventory, for short-term decision making and strategic decision making, for planning and controlling costs, and for cost reimbursement continued 4- 4- Different product costs for different purposes Current or future product costs? Current product costs are relevant for inventory valuation Future product costs may be relevant for input into some decisions Frequency of cost information? Infrequently for long-term decisions, or even short-term decisions More regularly for inventory valuation In summary, product costs may differ over The range of costs included Current or future costs Frequency of information required 4- Designing product costing systems Identify the managers’ needs All product cost information may not come from a single product costing system Future product costs Long-term product costs Inventory valuation Cost and benefits of providing various cost estimates must be assessed 4- Flow of costs in manufacturing . | Chapter 4 Product costing systems 4- Product costing Product costing systems Accumulate product-related costs and use procedures to assign them to the final products In some businesses, upstream and downstream costs are regarded as product related Upstream costs—research and development, product design, supply Downstream costs—marketing, distribution, customer service Product costs are the input to the product costing system 4- 4- Different product costs for different purposes Product costs can include upstream, manufacturing and downstream costs Inclusion of various costs depends on the timeframe and type of decision to be made Managers’ needs for product cost information will vary depending on the type of decision to be made and managers’ personal preferences continued 4- Different product costs for different purposes Cost for inventory valuation for external reporting must include only manufacturing costs For long-term decisions about products, a wider definition