Adv Dip Mgt Accounting lecture 2 Jan 21 2018

Adv Dip Mgt Accounting lecture 2 Jan 21 (Sunday) 2018


1. For a start, a revision of  the "cost object" concept (video); a slide on its basic ideas.

2. The following notes will be covered:

1. Direct vs indirect cost (2 pages); also note the different types of cost assignment.; the concept with regard to product cost (slide).
2. Prime costs and conversion costs (1 page); a diagram for clarification.
3. Specific cost terms - explanation (3 pages)
4. Cost classification (2 pages)
5. Cost classification II (2 pages)
6. Part 2 note on cost driver (3 pages); some ABC examples.
7. Cost behavior calculation examples (2 pages); a closer look at the concept of fixed cost (video), considering the factor of relevant range.
8. Breakeven analysis (6 pages): the formulas;  [a related YouTube video]; breakeven analysis (b) margin of safety (2 pages) [a related YouTube video]; also note breakeven analysis diagram and two examples: example 1; example 2. {Note that breakeven analysis is covered in a slightly broader topic called CVP analysis}.
9. Part 2 exercises on cost terms [Questions and answers]

Some more complicated concepts to consider:
(1) What is avoidable fixed cost (video)?
(2) What are committed and discretionary fixed costs (video)?
(3) Estimate mixed costs with the high-low method (video)?

3. Videos to review in class

• Cost of goods manufactured; a diagram on an example.
• Cost of goods sold; a diagram on its template.
• Some ideas on absorption costing; an illustrative diagram

4. Due to some doc processing errors, a few of the docs will only be distributed to the class on Jan. 21, 2018. The docs can also be found in Facebook subject group.