Chapter 1 Flashcards
Cost object
anything for which cost data are desired ie: specific patient, products, customers,etc.
direct cost
cost easily traced to its cost object ie: cost of paper needed to make 200 brochures would be direct cost of the customer
indirect
cost cannot easily be traced to cost object ie” factory managers salary for chicken noodle soup.
common cost
no traceable cost object ie: no part of pilots wage is determined by passenger
raw materials
materials that go into final product
direct materials
play special part in final product and costs can be traced ie” electrical components in Samsung cell phones
direct labor
labor costs easily traced back to individual units of product ie” assembly line workers
prime costs
direct materials cost + direct labor cost
manufacturing overhead
all manufacturing costs besides direct materials and direct labor
indirect materials
smaller elements that play an integral role in final product but cannot be traced to individual unit of product ie: nails & screws
indirect labor
labor of janitors, custodians, handlers that played a part but cannot be traced to an individual product.
conversion cost
direct labor+ manufacturing overhead
selling costs
all costs incurred to secure order and to get product into hands of customer.
administrative costs
executive, organizational, and clerical costs associated with general management instead of manufacturing and selling.
product costs
costs involved in acquiring or making a product. consists of direct materials direct labor manufacturing overhead, recorded as expenses in period of goods sold
