About This Chapter
Product & Service Costing - Chapter Summary
Organizations make many of their decisions about products and services by first determining all of the costs involved. This chapter goes over the different formulas, terms, and concepts related to product and service costing. Our expert instructors provide clear explanations of these topics in short text and video lessons. Each lesson can stand on its own, so you can watch the lessons individually, in order, or skip around, depending on your needs. At the close the chapter, you will be prepared to:
- Summarize which factors influence the decision to outsource
- Show how cost and product curves relate to production possibility curves
- Determine the relevant costs involved with accepting orders
- Establish how make-or-buy decisions are impacted by relevant costs
- Outline some of the major decisions influenced by relevant costs
- Evaluate how flow of costs are monitored without journal entries
- Compare long-run and short-run costs
- Figure out how to calculate differential cost in accounting
- Name examples that show the cost of quality
- Describe the methods used in cost accounting for waste
1. Factors Affecting the Decision to Outsource
Watch this video lesson to learn how a business decides whether to outsource or not. Learn the reasons why outsourcing can sometimes be cheaper and thus more profitable for a company.
2. Product & Cost Curves: Definitions & Use in Production Possibility Curves
Ever heard of having too many cooks in the kitchen? Product and cost curves demonstrate the real economics behind having too much help, too many gadgets, and not enough money to go around.
3. Identifying Relevant Costs in Accepting an Order
Orders often come with strings attached. In this lesson, we'll look at the relevant costs in accepting an order, seeing how much the difference between fixed and variable costs matters.
4. Impact of Relevant Costs on Make-or-Buy Decisions
Companies are often faced with many decisions, and a reoccurring one is whether it is better to make or buy certain goods or services. This lesson provides details on the impacts of such decisions.
5. Relevant Costs to Selling or Processing Materials Further
Companies know that there is a point where they sacrifice profit in favor of other aspects of production. However, knowing where that line is can be difficult. In this lesson, we learn about the relevant costs of further production.
6. Relevant Costs to Repair, Retain or Replace Equipment
Managers of all types are constantly having to decide whether or not to repair, retain, or replace equipment. In this lesson, we learn how to make those decisions based off of relevant costs, with or without the inclusion of sunk costs.
7. Relevant Costs in Eliminating a Product or Segment
Companies are constantly adapting, which means that they have to work to realize when it is time to look at ending products. In this lesson, we'll look at the relevant costs of eliminating a product or segment.
8. Flow of Costs without Journal Entries
As an item is manufactured, it moves through different stages during its conversion from raw materials to finished goods. In this lesson, you will learn about the flow of costs for manufactured goods.
9. Short-Run Costs vs. Long-Run Costs in Economics
In this lesson, we look at the role of short-run costs and long-run costs for producers. We see how both are essential to companies, while each has a specific role in long-term survival and daily operations.
10. Differential Cost in Accounting: Definition, Analysis & Formula
Each day we make decisions, but how much thought goes into all of the differences for each choice? Differential costs in accounting analyze those variations in depth; this lesson shows you how.
11. Cost of Quality: Definition & Examples
Think that saving a few dollars on production by buying inferior goods is a good idea? Think again. This lesson on cost of quality shows that poor quality often has many added costs.
12. Cost Accounting for Waste: Methods & Importance
Waste is a common occurrence in manufacturing, retail and other businesses. In this lesson, we'll explain why this is important and detail the methods for cost accounting for waste.
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Other chapters within the Accounting 303: Cost Accounting course
- Cost Classifications in Accounting
- Costing Methods & Techniques
- Formulas for Cost Accounting
- Standard Costs in Accounting
- Job Order Cost System in Accounting
- Process Cost System in Accounting
- Activity-Based Costing Overview
- Budgetary Process
- Cost Behavior Analysis
- Cost-Volume-Profit Analysis Overview
- Cost Estimation
- Service Department & Joint Cost Allocation
- Cost Accounting for Decision Making
- Ethics in Cost Accounting
- Modern Trends in Accounting
- Required Assignments for Accounting 303
- Studying for Accounting 303