Introduction to Cost and Management Accounting Flashcards
What is cost accounting?
The process of gathering and analysing costs for the purpose of product, job and process costing and inventory valuation
What are the 2 basic types of cost accounting systems?
Job order cost system
Process order cost system
What are the 5 principles of CIMA code of ethics?
Integrity
Objectivity
Professional competence and due care
Confidentiality
Professional behaviour
What is a cost?
The unavoidable expenses necessary in producing products or rendering services
What are cost objectives?
The purpose for which costs are collected and measured
What are the two types of product costs?
Production costs
Non-manufacturing costs
What are the 3 elements of production costs?
Direct material
Direct labour
Manufacturing overheads
What are the 2 types of non-production costs?
Administrative costs
Marketing, distribution and selling costs
When should costs be recognised in financial accounting?
In the period the income for which the expense was incurred is recognised
What are sunk costs?
Costs already incurred that cannot be changed by decisions now or in the future
What is the high-low method?
Cost accounting method that uses the highest and lowest total costs to estimate the fixed and variable elements of a mixed cost
What is the least squares regression method?
Method that aims to plot the best fit line based on data provided
