Cost for Decision Making
Area of Study
Accounting, Business, Business Administration
Taught In English
Recommended U.S. Semester Credits3
Recommended U.S. Quarter Units4
Hours & Credits
JUSTIFICATION OF THE COURSE:
In a global economy, in an increasingly competed and competitive market, it is fundamental for the success
of the businesses that the companies are efficient and productive. This can be achieved, having control of
the operation, maximizing profits, knowing and minimizing the production cost of goods and services,
obviously without sacrificing the quality of them
For this it is important to make a good cost management, that is, knowing, understanding and applying the
different concepts and quantitative and qualitative variables of cost accounting.
Allow students in the administrative area to understand the fundamentals of costs and their
quantitative and qualitative variables, in order to develop a capacity for analysis and business vision
oriented to decision-making.
Know and analyze the different concepts and terms of costs that are the basis of the
accounting information used for the presentation of internal reports.
Know and understand the cost structure and its importance in determining the results
Know and understand the increasing incidence of costs and the essential need
of its permanent evaluation and control for the successful administration of business.
Understand the importance of Costs as a tool for planning, control and decision making.
UNIT No.1: INTRODUCTION TO COST THEORY
Costs and their relationship with the Environment (basic foundations)
Objectives of Financial, Management and Cost Accounting
Concepts of Cost and Expenditure. Classification of costs
Costs and the management information system
UNIT No.2: ANALYSIS OF TRADITIONAL COST
Analysis of the three elements of cost MATERIALS: (NIC 2.10-11-14)
The administration and control of materials: include valuation of inventories and the subject of
by-products and co-products.
Transformation Cost: (IAS 2.12-13-19), (IAS 19.8 to 10)
Control and Labor Cost
The administration and control of the factory overhead cost. Depreciation. (IAS 16.43 to 49)
The cost cycle and the presentation and analysis of the cost status in manufacturing, trading and
Costs in the income statement. (NIC 1)
The systems of accumulation of costs by orders and processes (basic foundations)
UNIT No.3: VARIABLE COST AND TOTAL COST
Presentation of the income statement by Absorbent or Total costing
Presentation of the income statement by Variable costing
Comparison between income statements by Total and variable costing
Short-term decision making with costs (basic fundamentals)
UNIT No.4: STANDARD COST
Conceptual Framework (basic foundations), (NIC 2.21)
Variations of direct materials
Variations of direct labor
Variations of Factory Overhead Cost (three variations method)
Identification of the causes of variations
UNIT No.5: ACTIVITY BASED COST
Activity-based costing - ABC
First Midterm (20%)
Second Midterm (25%)
Final Term (30%)
Horgren, Foster, Datar, Cost Accounting, a Managerial Emphasis. Tenth Edition, Prentice Hall.
Lanen, Anderson, and Maher, Fundamentals of Cost Accounting. 4th Edition, 2011, McGraw Hill.
Morton Backer, Lyle Jacobsen, Cost Accounting, a Managerial Approach. McGraw-Hill