Cost for Decision Making

Universidad EAFIT

Course Description

  • Course Name

    Cost for Decision Making

  • Host University

    Universidad EAFIT

  • Location

    Medellín, Colombia

  • Area of Study

    Accounting, Business, Business Administration

  • Language Level

    Taught In English

    Hours & Credits

  • Contact Hours

    48
  • Recommended U.S. Semester Credits
    3
  • Recommended U.S. Quarter Units
    4
  • Overview

    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.
    GENERAL PURPOSE:
     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.
    SPECIFIC OBJECTIVES:
    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.
    TOPICS:
    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
     Exercises
    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
    services companies.
     Costs in the income statement. (NIC 1)
     The systems of accumulation of costs by orders and processes (basic foundations)
     Exercises
    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
     cost-volume-profit Analysis
     Short-term decision making with costs (basic fundamentals)
     Exercises
    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
     Exercises
    UNIT No.5: ACTIVITY BASED COST
     Activity-based costing - ABC
     Theoretical foundations
     Exercises
    EVALUATION
     Quizzes (25%)
    First Midterm (20%)
    Second Midterm (25%)
    Final Term (30%)
    BIBLIOGRAFÍA
    Horgren, Foster, Datar, Cost Accounting, a Managerial Emphasis. Tenth Edition, Prentice Hall.
    2000.
    Lanen, Anderson, and Maher, Fundamentals of Cost Accounting. 4th Edition, 2011, McGraw Hill.
    Morton Backer, Lyle Jacobsen, Cost Accounting, a Managerial Approach. McGraw-Hill