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Putting Forth the Effort DOES Pay Off in the End
As Bill mentioned in our previous post, we recently gave a seminar on the current trends in cost accounting. One of the attendees discussed how to determine the allocation of fixed overhead. He...
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The Components of a Successful Job Costing Model: Part Two – Segregating Costs
As mentioned in my previous blog, when preparing a cost model in today’s manufacturing environment, there are several key steps that should be followed to have an effective, comprehensive and accurate...
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The Components of a Successful Job Costing Model: Part Three – Choosing the...
Whenever cost managers are faced with the decision related to how to allocate overhead cost to production, they have a number of choices related to how those costs are best allocated to production and...
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Can You Really Afford to NOT Know Your Costs?
“I know I need to know my costs, but I am afraid that things are going to slow down and I am just not sure I can afford to pay to figure out my costs.” This is a quote from one of my recent clients....
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Top 11 Most Common Costing Issues: Issue #2
Once again, this common costing mistake comes from our experience working with clients and from those who attend our cost forums. I would rank this issue near the top of all the issues. If not number...
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Top 11 Most Common Costing issues: Issue #9
Failure to Identify How Costs are Properly Classified Occasionally we will meet with cost managers who are struggling with an unreliable cost system that they believe is related to some portion of the...
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Setup Charges: A Separate Cost Band?
In my most recent job costing assignment, I was working with a small manufacturer who had a very small number of cost centers and a very limited number of product lines. We were trying to keep the...
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What is the Deal With Overhead In Inventory?
A few days ago I got a call from an old friend who is working as a CPA in another state. Although he doesn’t do much manufacturing work, he has several clients who are manufacturers. One of these...
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Cookie Jar Reserves
In my last post I talked about a manufacturing company that had been using the direct costing method for valuing their inventory for many years and my conversation with the CFO concerning the effects...
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When Did You Last Change Your Allocation Rate?
How often do you change your overhead allocation rate? Has it been the same since 1972? Did you just change it last month? Typically you should review and change your overhead allocation rate every...
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One Year-End Overhead Calculation
At a recent seminar we were teaching concerning cost accounting, one of the participants started a conversation about how insignificant the application of overhead and other non-material costs of...
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Overhead Calculations and Inventory
One question we often hear is, who must include overhead in their inventory, how much should be included, and how should it be calculated? There are three important factors associated with overhead and...
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