L10 Cost Estimating Flashcards
Costs is …
the amount of money sacrificed for g/s to bring a current or future cashflow to the organisation
What is the difference between direct and indirect costs
direct costs are easily tracked to a product or service and indirect costs are not and are called overhead
How do you estimate overhead
Take last years overhead, make an estimate of present years overhead.
What does the financial accountant do
produce financial statement that conveys information to outside parties
What does the management accountant do
provides info useful for the operation of the company
Cost accounting is ….
the technical process by which expenses are allocated to products. They determine costs of good and rates (labour)
What’s the difference between an expense and an expenditure
Everything starts as an expenditure (money to acquire an asset or service). Expenses are the amounts of money used during a given year for the production of g/s sold by the company.
What are the three costing methods
Process costing
job order costing
activity based costing
What is process costing
assigning average costs to each unit of production
What is job order costing
differentiating the (direct) costs per job to see how profitable each job is
What is activity based costing
calculating what percentage of overhead should be assigned to a job
What is depreciation
the expense part of an expenditure that falls within the period.
When a good comes at a fixed unit price, a company controls…
Level or quantity of what it needs
quantity it needs for doing something
type of machines it will use
efficiency of the manufacturing process
