Cost

Accounting
CHAPTER 1
Introduction
Guo liting
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LEARNING OBJECTIVES
1. Describe what is cost accounting and how

cost accounting supports managerial

accounting and financial accounting

2. Understand why this course is so important

3. Master how to learn this course

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LEARNING OBJECTIVE

Describe what is cost accounting

and how cost accounting

supports managerial accounting
and financial accounting

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Cost

Sacrificed resource to achieve a specific

objective
It is usually measured as the monetary
amount that must be paid to acquire
goods and services

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Accounting Discipline
Overview
Managerial Accounting measures, analyzes

and reports financial and nonfinancial

information to help managers make
decisions to fulfill organizational goals.
Managerial accounting need not be GAAP
compliant.
Financial Accounting focus on reporting to

external users including investors, creditors,

and governmental agencies. Financial
statements must be based on GAAP.
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Financial and Managerial

Accounting
Financial Accounting focus on external

users and GAAP rules

Managerial Accounting focus on
internal users and is not necessarily
GAAP-driven. Also provides data for
financial accounting. This includes:
Cost Accounting
Cost Management

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Major Differences Between

Financial & Managerial
Accounting
Managerial
Accounting

Financial Accounting

Purpose

Decision making

Communicate financial
position to outsiders

Primary
Users

Internal managers

External users

Future-oriented

Past-oriented

Do not have to follow

GAAP; cost vs. benefit

GAAP compliant;
CPA audited

Ultra current to very

long
time horizons

Historical monthly,
quarterly reports

Designed to influence
8
employee behavior

Indirect effects on
employee behavior

Focus/Empha
sis
Rules
Time Span
Behavioral
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Issues

Cost Accounting
Provides information for both managerial

accounting and financial accounting.

It measures and reports financial and nonfinancial data that relates to the cost of
acquiring or consuming resources by an
organisation.

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Cost management
The approaches and activities of managers

to use resources to increase value to

customers and to achieve organizational
goals
Amounts and kinds of material used
Changes in plant processes
Changes in product designs
.

Linked with revenue and profits

Cost management continuous reduction in

costs
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Financial
Accounting
Accountin
g
Managerial
Accounting

Cost
Accounting

Cost
Management

LEARNING OBJECTIVE 2
Understand why this course is so

important

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Cost accounting is the base of

product pricing
Cost control can help enterprises to
improve profits
Modern cost accounting takes the
perspective that collecting cost
information is a function of the
management decisions being made

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 1.34
2.35

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LEARNING OBJECTIVE 3
Master how to learn this course

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The primary textbook

Charles T. Horngren ,Srikant M. Datar,

George Foster, Maghav Rajan,

Christopher Ittner,Cost Accounting: A
Managerial Emphasis (thirteenth edition)
, China Renmin University
Press Beijing 2011

Lanen willam, Fundamentals of cost

accounting, Mcgraw-hill education

Course content
Chap 1 : The Accountants Role in the

Organization
Chap 2 : An introduction to cost terms and
purposes
Chap 4 : Job costing
Chap 5 : Activity-based costing and activitybased management
Chap 15 : Allocation of support-department
costs, common costs, and revenues

Chap 16 : Cost allocation: joint products and

byproducts
Chap 17 : process costing
Chap 18: spoilage, rework, and scrap

Weighting of final grade

Attendance
attitude, class
activities,& participation

10
10

Examination

40

Assignment

40

Total

100

THE END!

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