Revision
 Topic 1 : introduction
a. Types of organizations
 COGS
 Manufacturing
 Variable costing
 Absorption costing (full costing)
b. Types of cost
 Variable cost
 Fixed cost
 Period cost VS Product cost
i. Product: DM + DL + VOH + FOH if full costing is used otherwise
1. It goes to the inventory and then if sold to the income
statement
ii. Period : goes directly to the income statement
 Conversion cost
 Prime cost
 Decomposing the mixed cost
i. High and low method ! in order to get what portion is variable
and fixed cost
 Topic 2 : variable costing and sgment reporting
o Influencing the profitability
 Topic 3 : Activity based costing (more challenging)
o How to allocate my common fixed cost to different product lines in order
to take better decisions (for growth, cutting etc…)
o Cost pools + drivers are given
 So measure cost by product and allocate
 Topic 4 : flexible budgeting
o Could be to measure direct labor or Selling and admin budget etc…
 Topic 5
o ROI

Per department, global for whole company
o RI
 Expected profits – RRR * invested capital
o EVA
o  problems of the 3 = they focus only on KPI that could lead to narrow
down decisions
o