Handout 1 Flashcards
Q
It refers to the method and process ofascertaining the costs. It also involves classifying, recording, and
allocating the expenditure of an organization to determine the costs of products or services.
Costing
It refers to the costs incurred in the factory for converting raw materials
into finished goods.
Manufacturing costs
It refers to the unincurred costs in transforming materials to finished
goods.
Nonmanufacturing costs
It refers to the costs that can be traced directly to a particular object of costing such
as a particular product, department, or branch.
Direct costs
Q
It refers to the costs that cannot be traced to a particular object of costing.
Indirect costs
Also called common cost or joint cost.
refers to the costs that form part of inventory and are charged against revenue.
They are also called inventoriable costs
Product costs
Q
It refers to the costs that are not inventoriable and are immediately charged against
revenue.
Period costs
It refers to the ongoing business expenses not including or related to direct labor
or direct materials.
Overhead cost
It refers to the benefit forgone or given up when an alternative is chosen over
the other/s.
Opportunity cost
It refers to the predetermined cost based on some reasonable basis such as past
experiences, budgeted amounts, and industry standards.
Standard cost
It refers to the historical costs that will not make any difference in making a decision.
Sunk costs
It refers to the costs resulting from an organization’s structure or the use of its
facilities.
Committed costs
It refers to the costs resulting from a management decision to spend a
particular amount of money for a specific purpose.
Discretionary costs
It refers to the costs that can be influenced or controlled by a supervisor or
manager for a given period of time.
Controllable costs
It refers to the expenditure which results in the acquisition of an asset.
Capital expenditure
