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Cost Accounting: Analyzing Product Profitability

Video Introducing this tutorial


Introduction
Welcome to cost accounting
Course prerequisites
How to use the exercise files
Cost accounting: High-level overview

1. Understand Company Costs Related to Products
Product profitability
Understanding the importance of product profitability
Complexity of multiple products
Direct fixed costs
Direct variable costs
Indirect fixed costs
Indirect variable costs

2. Determine Your Baseline
Product profitability baseline
Decide on a timeframe
Gather revenue and cost information
Assign cost categories
Direct cost-product allocation logic
Indirect cost-product allocation logic
Calculate product profitability baseline

3. Plan for the Future
Connect targets with profitability
Orient planning around the baseline
Build your target baseline
Using cost evolution assumptions
Analyzing your pricing
Taking product mix into consideration
Calculate probable product profitability

Conclusion
Next steps

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