Chapter 1 : Introduction to management accounting Flashcards
Cost Card
A document which groups the costs of a product or service in order to arrive at total costs.
Cost Centre
An area of the business for which costs are gathered
Cost unit
The individual product or service for which costs are ascertained
Profit centre
An area of the business for which both revenues and costs can be ascertained and therefore a profit or loss for a period can be determined
Investment centre
manager of investment center is responsible for profit & net assets
suitable cost unit within the accounts payable department
Invoiced processed
production cost centre examples
assembly, finishing and packing
Service cost centre examples
canteen, maintenance and stores
Examples of direct costs
Direct materials
Direct Labour
Direct Expenses
What is prime costs
Total direct costs
Examples of indirect costs (production overhead)
Production overheads and production cost
Examples of non-production overheads
Selling and distribution, administration, finance
Management accounting three main areas
Planning
Control
Decision making
Segmented cost
The costs relating to a component of the business which generates revenue. e.g. student prices
