1. PRAYER:
Our Dear Heavenly Father,
We come before You with heart full of gratitude and a desire to learn and grow. We
thank You for the opportunity to seek knowledge and wisdom.
We ask for Your guidance and presence in our journey. Grant us open mind to grasp
new concepts, curiosity to explore new ideas, and the determination to overcome any
challenges we may encounter along the way.
May we foster an environment of respect, collaboration, and mutual support. Help
us to encourage and uplift one another, as we work together towards our common goal of
learning and growth.
We acknowledge that You are the ultimate source of all knowledge and
understanding. We humbly ask for Your guidance and enlightenment that we may not only
gain knowledge but also develop wisdom and discernment to apply it in our lives.
This we ask through the mighty name of our Lord Jesus Christ, Amen!
Management Accounting: MBA 509
2. HOUSE RULES:
01 02 03 04
PLEASE BE
ATTENTIVE.
Management Accounting: MBA 509
PLEASE BE
COOPERATIVE IN
SHARING YOUR
THOUGHTS, IDEAS &
EXPERIENCES.
REMEMBER THERE’S
NO WRONG ANSWER.
PLEASE RESERVE
YOUR QUESTION
AFTER THE
PRESENTATION.
HAPPY
LISTENING!
4. OBJECTIVE:
“Buckle up and get ready to uncover the secrets to
financial excellence!"
can be harnessed as powerful
drivers of success in today’s
business landscape.
Cost Control &
To have a deeper
understanding of how
Management Accounting: MBA 509
Managerial
Accounting
5. “COST CONTROL CHALLENGE”
“ESTIMATE THE TOTAL COST OF THE ITEMS WITHOUT
GOING OVER ”
How much is your estimation?
Management Accounting: MBA 509
2 Deli medium Scissor for
Office & School Supplies
By Shopee
2 Reams Hard Copy Bond
Paper Legal Size & Letter
A4 Size, 70gsm
By Shopee
10 pcs Veco Folder Press
Board US Short Colored
By Shopee
Binder Clips 1”, ¾”, 1 ¼”, 1
5/8” and 2” 12 pcs. / box
By Shopee
6. ACTUAL TOTAL COST = P 969.00
Management Accounting: MBA 509
“COST CONTROL CHALLENGE”
7. “ESTIMATE THE TOTAL COST OF THE ITEMS WITHOUT
GOING OVER ”
How much is your estimation?
Management Accounting: MBA 509
1 pc. Firefly Rechargeable Emergency Light LED Bulb
5watts
by Lazada Philippines
1 Gallon Davies Sun & Rain Gray Elastomeric
Waterproofing Indoor / Outdoor
by Lazada Philippines
“COST CONTROL CHALLENGE”
8. ACTUAL TOTAL COST = P 1,004.00
Management Accounting: MBA 509
“COST CONTROL CHALLENGE”
9. “ESTIMATE THE TOTAL COST OF THE ITEMS WITHOUT
GOING OVER ”
How much is your estimation?
Management Accounting: MBA 509
1 Gallon 70% Ethyl Alcohol
Disinfectant Antiseptic
by Lazada Philippines
1 pc Safeguard & Silka 60g
Bar Soap
by Shopee
“COST CONTROL CHALLENGE”
10 rolls 100% Virgin Pulp Tisyu
Coreless Tissue
by Shopee
10. ACTUAL TOTAL COST = P 272.77
Management Accounting: MBA 509
“COST CONTROL CHALLENGE”
12. COST
- is the value of money that has been used up to
produce and buy something that has weight and
value.
CONTROL
Management Accounting: MBA 509
- it is a process by means of which managers
attempt to direct, regulate, and restrain the
actions of people in order to achieve
desired goals.
O
O
13. Management Accounting: MBA 509
- It is also the process whereby the managers attempt to regulate costs and
guard against excessive costs.
15. Classifications:
COST
1. Direct Cost:
- Cost directly attributable to the production of a specific product such as raw
materials used in manufacturing.
Management Accounting: MBA 509
* Direct Materials:
General
17. - Labor costs directly associated with the production of goods or operations or services,
including the cost of salaries, wages, bonus, commission and benefits for production
workers or employees of a company.
Management Accounting: MBA 509
* Direct Labor:
18. 2. Indirect Cost (Overhead):
- Cost of materials that are not directly traceable to a specific
product or job like lubricants, cleaning supplies, etc.
- Labor cost is not directly tied to production, such as salaries
of supervisors, maintenance workers, or administrative staff.
Management Accounting: MBA 509
* Indirect Materials
* Factory Overhead:
* Indirect Labor:
- All other indirect costs incurred in the production process,
including utilities, depreciation on equipment, rent for factory
space, and maintenance expenses.
24. 3. Variable Cost:
Management Accounting: MBA 509
- Costs that vary in direct
proportion to changes in
production or activity levels. For
example, if you produce more
units, variable costs like direct
materials and direct labor will
increase proportionally.
25. 4. Fixed Cost
6. Period Cost
5. Semi-Variable Costs (Mixed Costs)
- Costs that remain constant regardless of changes in production or activity
levels. Common fixed costs include rent, insurance, and salaries of
permanent staff.
- Cost that have both a fixed and a variable component. For instance, a
telephone bill may have a fixed monthly fee and a variable component based
on usage.
Management Accounting: MBA 509
- Costs that are not tied to the production of specific products but are
incurred over a certain period, such as selling and administrative expenses,
marketing costs, and office supplies.
26. 7. Product Cost
8. Periodic Costs
- Costs directly associated with the production of goods. Typically capitalized
as inventory until products are sold. Example, direct materials, direct labor
and factory overhead costs.
Management Accounting: MBA 509
- Costs related to the passage of time rather than specific production
activities. These costs are treated as expenses on the income statement in the
period they are incurred.
27. 9. Controllable Cost
10. Uncontrollable Costs
- Costs that can be influenced or controlled by managerial decisions. For
example, reducing direct labor costs by changing production processes.
- Cost that cannot be directly influenced or controlled by management. These
may include uncontrollable market price changes or regulatory expenses.
Management Accounting: MBA 509
28. Management Accounting: MBA 509
Qualities of a GOOD CONTROL SYSTEM :
• Must fit the needs, rather than interfere with the operation.
• Must be Cost-Effective.
• Must provide accurate, detailed data to identify the need for
corrective measures and proper steps to be taken.
• Must be simple to operate.
• There must be a separation of duties so that no one person has
control over a transaction from start to finish.
• Must be continuous
• Reports be timely
• Must be action oriented
29. Management Accounting: MBA 509
Cost Control Techniques:
- Establishing Standards
- Establishing Procedures
- Training
- Setting Examples
- Observing and Correcting Employee Actions
- Requiring Records and Reports
- Censuring and Disciplining Employees
- Preparing and Following Budgets
31. Production Cost Predicting or Predictive Cost
- also known as manufacturing costs or the expenses directly
associated with the process of goods that are incurred during the
actual production of goods and can be attributed to specific units
or batches of products.
- often referred to as forecasting or budgeting costs that are
estimated future expenses that a company expects to incur based on
its financial projections and business plans.
- These cost are used for planning, decision-making and budgeting
purposes. They are tied to past production but forward-looking.
- Purpose: Budgeting, Decision-Making, Financial Planning
- Components: Direct Materials, Direct Labor & Factory Overhead - Components: can encompass both production and non-
production costs such as:
• raw materials price projections
• Labor costs estimates
• Overhead cost forecasts
• Sales & marketing expenses
• Research & Development Costs
• Capital Expenditures & Investments
- Allocation: It is allocated to individual products or production
batches. They become part of the cost of goods manufactured
(COGM) and are usually recorded as inventory until the products are
sold. When products are sold, these costs are transferred to the cost
of goods sold (COGS) on the income statement.
- Time Frame: Predicting costs are typically prepared for future
periods, such as monthly, quarterly, or annually, and may cover
short-term or long-term financial planning.
