Cost Analysis for Engineers and Scientists

Fariborz Tayyari

• Publisher: CRC Press
• Year: 2021
• Print ISBN: 9781138362284
• eBook ISBN: 9780429778162
• Topic: Economics
• Subtopic: Industrial Design
• Index: Economics

This book helps apply managerial accounting techniques to problems in areas including that of cost estimation, cost control, product pricing, and business segment discontinuation. It is a valuable resource for short-term courses and seminars conducted to train professionals and practitioners in engineering and manufacturing cost analysis.

Cost Analysis for Engineers and Scientists introduces the fundamentals accounting information systems and manufacturing costs. It also presents product costing and manufacturing cost allocation to individual as well as joint products. The concepts and applications of cost-volume-profit and breakeven analysis for single-product and multiple-products are also discussed.

It is intended for engineers, managers, and scientists to apply cost analysis techniques for assessing engineering and financial projects.

A solutions manual and PowerPoint slides are available for qualified textbook adoption.

1 Accounting and Cost Information Systems

DOI: 10.1201/9780429432163-1

Learning Objectives

• Learn the basics of the accounting process and information.
• Maintain accounting bookkeeping and records.
• Prepare financial statements for a newly established business.
• Recognize classes of assets, liabilities, and net worth.
• Understand the profitability of a business in financial reports, which are sources of financial decision-making for both internal and external individuals.

1.1. Introduction

A meaningful engineering economic and cost analysis needs familiarity with financial information. Accounting records provide such information. In order for the engineering economics analysts to be able to efficiently communicate with accountants and obtain the necessary data, they need to understand accounting terminologies and the accounting and cost information systems.

Regardless of the type and size of a business, accounting information is crucial for decision-making, financial planning, and assessing economic performance.

This chapter introduces some basic accounting terminologies, accounting principles, and accounting concepts. Learning the terms and concepts, the reader will be able to understand the financial reports and statements and other features of accounting and cost information systems. Knowledge of such information is crucial for engineers and scientists who seek economic justification for their engineering proposals or career in management.

1.2. Terms and Definitions

Accounting: The American Institute of Certified Public Accountants [1] defined accounting as follows:

“Accounting is the art of recording, classifying and summarizing in a significant manner and in terms of money, transactions and events which are, in part at least, of a financial character and interpreting the results thereof.”

This definition helps the reader better understand accounting through the following basic interpretations:

• Accounting is an art: Accounting is an art because it requires skills and creative judgment. A trained accountant performs accounting functions.
• Accounting involves interconnected “phases”: Recording is the process of writing down or keeping records of business trans...

Table of contents

• Cover
• Half-Title
• Series
• Title
• Copyright
• Contents
• Preface
• Author biography
• Chapter 1 Accounting and Cost Information Systems
• Chapter 2 Cost Analysis Fundamentals
• Chapter 3 Product Costing
• Chapter 4 Manufacturing Cost Allocation
• Chapter 5 Joint Cost Allocation
• 6 Manufacturing Cost Estimation
• Chapter 7 Cost-Volume-Profit Analysis
• Index