Companies do not only need to know the costs of different products, but they also need to know whether they gain a profit or realize a loss. We explain how companies use cost information to calculate their profit and assess their profitability. Depending on how companies account for changes in inventories, we distinguish "absorption costing" and "variable costing". In addition, some companies structure their income statement according to the "nature of expense method", while others structure it according to the "cost-of-sales method". We explain both methods and discuss their advantages and disadvantages.
Cost Accounting: Profit and Loss Calculation
Cost Accounting: Profit and Loss Calculation
This course is part of Cost Accounting Specialization
Instructors: Gunther Friedl
6,353 already enrolled
Included with 
Gain insight into a topic and learn the fundamentals.
4.6
(63 reviews)
Intermediate level
Recommended experience
3 hours to complete
3 weeks at 1 hour a week
Flexible schedule
Learn at your own pace
What you'll learn
You will learn different methods of preparing an income statement.
You will learn to explain why different methods yield different profit numbers.
You will learn to choose the best-suited method for your decision situation.
Details to know
Shareable certificate
Add to your LinkedIn profile
Assessments
11 assignments
Taught in English
See how employees at top companies are mastering in-demand skills
Build your subject-matter expertise
This course is part of the Cost Accounting Specialization
When you enroll in this course, you'll also be enrolled in this Specialization.
- Learn new concepts from industry experts
- Gain a foundational understanding of a subject or tool
- Develop job-relevant skills with hands-on projects
- Earn a shareable career certificate
Earn a career certificate
Add this credential to your LinkedIn profile, resume, or CV
Share it on social media and in your performance review
There are 3 modules in this course
Companies do not only need to know costs of different products, but they also need to know their operating income - did we make a profit or did we face a loss? To calculate the operating income, companies prepare an income statement that compares total revenues and total costs. In this module, we show you how companies prepare income statements to link costs and revenues and to assess the company’s profitability.
What's included
3 videos4 readings4 assignments
Depending on how companies account for changes in inventories, we distinguish "absorption costing" and "variable costing". In addition, some companies structure their income statement according to the "nature of expense method", while others structure it according to the "cost-of-sales method". We explain both methods and discuss their advantages and disadvantages.
What's included
4 videos4 assignments1 discussion prompt1 plugin
Many companies use contribution margin accounting to measure success instead of the income-statement formats. Contribution margin accounting is a special income-statement format that displays variable and fixed costs separately. In this module, we discuss the advantages of contribution margin accounting over traditional income statements. Further, we outline the differences of simple contribution margin accounting and multi-leveled contribution margin accounting.
What's included
2 videos2 readings3 assignments
Instructors
Instructor ratings
4.3 (16 ratings)Offered by
Recommended if you're interested in Finance
Technical University of Munich (TUM)
Coursera Project Network
Technical University of Munich (TUM)
Technical University of Munich (TUM)
Why people choose Coursera for their career
Felipe M.
Learner since 2018
"To be able to take courses at my own pace and rhythm has been an amazing experience. I can learn whenever it fits my schedule and mood."
Jennifer J.
Learner since 2020
"I directly applied the concepts and skills I learned from my courses to an exciting new project at work."
Larry W.
Learner since 2021
"When I need courses on topics that my university doesn't offer, Coursera is one of the best places to go."
Chaitanya A.
"Learning isn't just about being better at your job: it's so much more than that. Coursera allows me to learn without limits."
Learner reviews
4.6
63 reviews
- 5 stars
73.43%
- 4 stars
17.18%
- 3 stars
6.25%
- 2 stars
1.56%
- 1 star
1.56%
Showing 3 of 63
MB
5
Reviewed on Oct 4, 2023
It is a very good course for those who are interested in learning very basic concepts of cost accounting...
NK
5
Reviewed on Mar 9, 2022
Even better than the first part "Product Costing". Especially enjoyed the quizzes in this one!
MT
5
Reviewed on Dec 17, 2023
Thank you for giving me the opportunity to learn for free
New to Finance? Start here.
Open new doors with Coursera Plus
Unlimited access to 10,000+ world-class courses, hands-on projects, and job-ready certificate programs - all included in your subscription
Advance your career with an online degree
Earn a degree from world-class universities - 100% online
Join over 3,400 global companies that choose Coursera for Business
Upskill your employees to excel in the digital economy
Frequently asked questions
Access to lectures and assignments depends on your type of enrollment. If you take a course in audit mode, you will be able to see most course materials for free. To access graded assignments and to earn a Certificate, you will need to purchase the Certificate experience, during or after your audit. If you don't see the audit option:
The course may not offer an audit option. You can try a Free Trial instead, or apply for Financial Aid.
The course may offer 'Full Course, No Certificate' instead. This option lets you see all course materials, submit required assessments, and get a final grade. This also means that you will not be able to purchase a Certificate experience.
When you enroll in the course, you get access to all of the courses in the Specialization, and you earn a certificate when you complete the work. Your electronic Certificate will be added to your Accomplishments page - from there, you can print your Certificate or add it to your LinkedIn profile. If you only want to read and view the course content, you can audit the course for free.
If you subscribed, you get a 7-day free trial during which you can cancel at no penalty. After that, we don’t give refunds, but you can cancel your subscription at any time. See our full refund policy.