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Introduction to Cost Accounting (College Prep)

The real costs involved in running a business are often deceptive. It takes a little art to see what's going on beneath the surface.

  • Course Length: 6 weeks
  • Course Type: Basic
  • Category:
    • Business and Career Preparation
    • College Prep
    • Life Skills

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The real costs involved in running a business are often deceptive. It takes a little art to see what's going on beneath the surface.

That art...is cost accounting.

You run a popular fish n' chips food truck. You sell 500 meals every day at $10 each. $5,000 a day. 

Not bad. But what if, every day, you're buying enough fish for 1,000 meals, and you throw out half of it every night as it spoils?

Good for the stray cats. Not so good for you.

Cost is about to become your favorite four-letter word. Well, maybe your second favorite.

This primer on financial statements will get you up to speed on basic accounting principles, regardless of your background or prior exposure (what you did late at night in Central Park that one day last summer doesn't count). After just a few lessons, you'll be armed with enough familiarity for an accounting surgeon's dissection of balance sheets, as well as the creation of basic income and cash flow statements. 

No scalpel necessary. Just calculators. You'll be all like, "Bring on the auditors!"

From now on, you will view the word "cost" with new meaning...as an all-inclusive series of sacrifices, rather than merely a number on a price tag.

This bookkeeping boot camp will get you prepared for the systematic analysis of both service and manufacturing businesses. It will be a headfirst dive into theoretical and real-life accounting, featuring actual SEC documents.

Once you get the hang of the lingo, you'll become a cash flow statement sleuth, figuring out what a company is doing right and wrong, even during your spare time. Especially if you're a puzzle person, finding financial fraud or predicting profit will become your new hobby. So long, scrapbooking classes.

Unit Breakdown

1 Introduction to Cost Accounting (College Prep) - Flying Overhead (Both Literal and Figurative)

Just like reading the wiki summary of a horror movie before turning off the lights and letting the film roll, this unit provides an overview of the cost accounting process. Defuse all the jump scares. Spoil the ending (net margin did it). We'll tell you why cost accounting provides value for companies and introduce you to concepts like margins, cash flow, capital expenditures, balance sheets, COGS and SG&A.

2 Introduction to Cost Accounting (College Prep) - Variance Analysis to the Rescue

Variance analysis represents the corporate version of the existential question, "Why me?" This unit details how companies make budgets...and how they use variance analysis to figure out why their budgets always turn out to be wrong. We'll also dive into relevant range and how it's used to decide when a company needs to stop making more stuff.

3 Introduction to Cost Accounting (College Prep) - The Bloom is Off the Rose (Depreciation in Dollars and Sense)

It's the black-and-white, foreign language section of the course: cost accounting as an inquiry into mortality and the fleeting nature of all things. This unit provides a detailed look at non-cash expenses, especially the monetary tracking of decay known as depreciation. Then, to lighten things up a bit, we take on some other topics: intangible assets, cash flow statements, working capital, and various ways of measuring profits.

4 Introduction to Cost Accounting (College Prep) - Whatcha Got? The Basics of Inventory and Intangibles

Are you a LIFO person or a FIFO person? No, it's not a question on a dating app...it's a key quandary of inventory accounting. In this unit, we'll help you answer that age-old conundrum. We'll also touch on goodwill accounting, debt-to-profit leverage ratios, EBITDA, and the impairment of intangibles.

5 Introduction to Cost Accounting (College Prep) - Reaching for Relevant Range

Every business has its limits. Relevant range helps determine where those are. This unit dives deep into the concept. It also details the cost accounting methods companies use to get the most out of their resources. We'll let you know how activity costing works and how you can use it to make better decisions about which products to make more of, and which products to scrap entirely.

6 Introduction to Cost Accounting (College Prep) - Marginal Cost-Volume-Profit Target Practice

How do you evaluate a company? Revenue? Profit? Margins? Swimsuit competition? This unit will help answer those questions. We'll outline the difference between cash flow and profit. We'll also highlight the importance of margins in determining a company's health. In addition, we'll detail the cost-volume-profit equation, which helps companies know how much of which products they should be making.

7 Introduction to Cost Accounting (College Prep) - Inventory Costing for Statements

It's difficult keeping track of all your stuff. You spend about 40% of your life looking for either your phone or your keys. You haven't seen your driver's license since that one night you got kicked out of Applebee's. And your favorite sweatshirt always ends up balled up underneath the bed. Companies have similar problems. But they have high-powered cost accounting methods to keep everything straight. In this unit, you'll learn about accounting for inventory, including all sorts of great acronyms, like FIFO, LIFO, and WIP.

8 Introduction to Cost Accounting (College Prep) - Transfer Costing and Accounting Ethics

Big companies have lots of divisions. Like siblings, these separate subsidiaries tend to squabble. This unit explains how transfer pricing boils those disagreements into dollars and cents. Meanwhile, we've got some deep philosophical matters to discuss, so turn on the black light and crank up the Schubert symphonies. We'll close out the course with a dive into the ethics and morality of accounting.