About This Chapter
Cost Measurement & Systems - Chapter Summary
Whether you already know a little or a lot about cost measurement and systems, this chapter can refresh or increase your understanding. Fun video and text lessons provide an in-depth look at various costing methods and how companies use them. Examine any lessons you choose in the sequence that suits your studies. In no time, you will be able to:
- Share the definitions of cost behavior and cost objects
- Explain how average and total costs differ from marginal costs
- List the advantages of standard costs
- Describe how to calculate absorption costing and variable costing
- Define by-product and joint costing
- Discuss the impact of financial statements on costing methods
- Differentiate between process costing and job order costing
- Provide definitions of activity-based costing and life-cycle costing
Tailor the resources in this chapter to your personal study needs. Access lessons anytime to ensure you can easily fit your examination of cost measurement and systems into a busy schedule. Take self-assessment quizzes and a chapter exam to feel prepared to address this subject in your class. Learn even more by submitting any lesson topic questions you have to our experts.
1. Cost Behavior: Definition & Pattern Analysis
In this lesson, we will look at cost behavior. We will also explain the three types of cost that a business needs to analyze when understanding cost behavior. The lesson will then conclude with a summary and a quiz.
2. Cost Object: Definition & Examples
In this lesson we will explore cost objects. We will define the term and look at some of the different types of cost objects. The lesson will then be concluded with a summary and a quiz.
3. How Marginal Costs Differ from Average & Total Costs
A major concern for producers is trying to figure out how much something costs to make. Through using marginal costs, total costs, and average costs, producers get a much better idea of the prices they should charge.
4. Standard Costs: Definition & Advantages
In this lesson, we'll explore the concept of standard costing and some of the advantages that this accounting method affords companies that implement it. When you are through, test your understanding with a quick quiz.
5. Absorption Costing: Definition, Formula & Example
In this lesson, we'll learn about absorption costing. We'll define it and learn how to calculate it. The lesson will conclude with an example and lesson summary about absorption costing.
6. Variable Costing: Method, Formula & Advantages
This lesson discusses variable costing. It explains how variable costs are determined, how they are calculated, and advantages of variable costing. Examples of variable costing are also provided.
7. The Effects of Financial Statements on Costing Methods
The way you calculate the cost of your inventory can change the profit you show on your financial statement. Learn how one method can show higher profits, while the other method can give you tax benefits.
8. Process Costing vs. Job Order Costing
This lesson introduces two traditional costing methods: job order costing and process costing. You'll see examples of both and learn how companies can utilize either or both processes in their business.
9. Activity-Based Costing: Definition, Formula & Examples
Manufacturing companies rely on product cost data to set product sales prices and determine if products are producing profits. This lesson covers activity-based costing and describes how to assign overhead costs to products using this method.
10. Life-Cycle Costing: Definition, Formula & Examples
In this lesson, we will learn the steps in life-cycle costing, its advantages and disadvantages, and how managers use the costing method to make decisions to purchase and maintain equipment.
Earning College Credit
Did you know… We have over 200 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.
To learn more, visit our Earning Credit Page
Transferring credit to the school of your choice
Not sure what college you want to attend yet? Study.com has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.
Other chapters within the Certified Management Accountant (CMA): Study Guide & Test Prep course
- Financial Statements Overview
- Financial Valuation, Recognition & Measurement
- Financial Strategic Planning
- Budgeting Concepts for Accountants
- Forecasting Techniques in Business
- Budgeting Methodologies in Accounting
- Annual Profit Planning
- Financial Projections
- Cost & Variance Measures in Performance Management
- Responsibility Centers & Reporting Segments
- Performance Measurement in Accounting
- Overhead Costs
- Understanding Supply Chain Management
- Business Process Improvement
- Governance, Risk & Compliance in Accounting
- Accounting Systems Controls & Security Measures
- Accounting & Enterprise Information Systems
- Data Governance
- Technology-Enabled Finance Transformation
- Data Analytics
- Basic Financial Statement Analysis
- Profitability Analysis
- Financial Statement Special Issues
- Basics of Corporate Finance
- Capital Management Overview
- Corporate Restructuring
- International Finance Practices
- Business Decision Analysis
- Risk Management for Business
- Investment Decisions
- Accountant Professional Ethics
- Certified Management Accountant (CMA) Flashcards