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Printable Handouts
Navigable Slide Index
- Introduction
- Unit costs - examples
- Unit costs - service companies (1)
- Unit costs - service companies (2)
- Unit costs - Manufacturing companies (1)
- Unit costs - Manufacturing companies (2)
- Cost of goods manufactured
- Schedule of cost of goods manufactured
- Determining the unit cost
- Direct material usage
- Schedule of cost of goods manufactured
- Calculating unit cost for one chair
- Calculating costs of goods sold
- Calculating operating income
- Module's takeaways
- Cost accounting systems
This material is restricted to subscribers.
Topics Covered
- Unit costs in service companies
- Unit costs in manufacturing companies
- Costs of goods manufactured
- Costs of goods sold
- Operating income
Talk Citation
Himme, A. (2018, January 31). Determining unit costs [Video file]. In The Business & Management Collection, Henry Stewart Talks. Retrieved November 11, 2024, from https://doi.org/10.69645/FQKB3660.Export Citation (RIS)
Publication History
Transcript
Please wait while the transcript is being prepared...
0:00
Hello everyone. I would like to welcome you to
this HSTalks lecture series on Managerial Accounting.
My name is Alexander Himme,
and I am the assistant professor for
Managerial Accounting at the Kuhne Logistics University in Hamburg, Germany.
In this third module,
we would talk about how service and manufacturing companies determine unit costs.
0:22
What are examples of unit costs and why is this important for managers to know?
As a manager of McDonald's,
you need to know the cost to make a cheeseburger.
As a manager of UPS,
you need to know the cost to transport a ton of freight for a kilometer.
For BMW, you would like to know the cost to make a car.
For Apple, you would like to know the cost to build an iPhone.
And for KPMG for example,
you would like to know the cost to prepare a tax return.
Knowing these unit costs helps managers set selling prices that will lead to profits.
In other words, the managers want to be sure that he or
she can receive a price from customers which is above the unit costs.
If that is not the case,
product or service which is sold is not profitable.
Knowing unit costs helps managers
further to compute the cost of goods sold for the income statement.
Here, you have a link between Financial Accounting and Managerial Accounting.
If financial accountants want to set up the income statement,
they need to know the costs of goods sold.
Cost of goods sold, are, in principle,
the number of units sold times the unit costs.
This information has provide a managerial accounting.
The same is true for the balance sheet.
For the balance sheet, financial accountants need to know the value of inventory.
This value is determined in general by
multiplying units and inventory times the unit costs.
In sum, managers have to plan and control their decisions.
A manager knows the unit costs then the manager can plan and control the costs of
resources needed to create product or service and deliver it to the customer.