Costing Flashcards
Prime cost
The total of all the costs directly attributable to a cost unit
Are dividends of interest to a cost accountant?
No - they are an investment return
Variable costs are (?) per unit of output
Constant
Cost objects or element of cost: Factory Rent
Element of cost
Cost objects or element of cost: Office Cleaning Labour
Element of cost
Cost objects or element of cost: wood to make a chair
Element of cost
Cost objects or element of cost: operating theatre
Cost object
Cost objects or element of cost: Branch of chain
Cost object
Cost objects or element of cost: Meal
Cost object
When inventory is the same at the start and end of a period - Which is cheaper absorption or marginal costing?
Neither - it will be the same as equal fixed costs carried by absorption in and out of period
When inventory is greater at the start of a period - Which is cheaper absorption or marginal costing?
Marginal - high inventory brought in more absorbed overheads in absorption costing
Absorption costing profit difference when sales exceed production
Net inventory reduction in units X fixed overhead per unit
Note this is specifically the FIXED overhead per unit and not the profit per unit
