Managerial Accounting (Simple Costing, Overhead Cost Allocation) - Divya Anantharaman

Introduction to Managerial Accounting
Lecture 9: Simple Costing, Overhead Cost Allocation
by Divya Anantharaman

In this lecture, the professor begins with a review of the Costing Process outline. The professor then provides a job costing example as a review, and provides the differentiation between actual costing and normal costing. The professor moves on to an overview of Activity-Based Costing, and discusses the limitations of simple costing methods, followed by an example. Finally, the professor discusses the following: overhead cost allocation in different company situations, effect of production automation on overhead cost allocation, over/under costing, and cross subsidization.

Recap of Last Class:
Outline of Costing Process: from 0:06 to 0:33

Job Costing Review Example: from 1:05 to 17:53
--- Actual Costing: 5:23
--- Normal Costing: 5:34
----- Difference: 5:58

Activity-Based Costing Overview: 18:10

Limitations of Simple Costing Methods: 18:45
--- Simple Costing Example: 19:34

Overhead cost allocation in a company with...
--- One product: 24:56
--- Two similar products: 25:18
--- Two dissimilar products: 26:18
--- More diverse products: 26:48

Production Automation effect
on overhead cost allocation: 27:20
--- Example: from 29:06 to 40:05

Over-costing & Under-costing: 34:18

Cross subsidization: 36:01

Over-costing & under-costing
are problematic in a corporate setting: 39:06

Inaccurate costing causes
over-pricing or under-pricing: 41:18

True overhead allocation information is unknown,
just approximates: 42:54

Activity-Based Costing Example: from 45:44 to 1:11:36

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