Management accounting Flashcards
Who and what are the users of management accounting?
Managers who control/ organise
more for future base
What are costs objects
Any activies or anything for which a separate meaurement of cost is required
e.g cost per unit/ hour
What the types of prodcution costs
Material
Labour
Production over heads
What are the types of proction overheads?
Indirect labour ( wages not involoved)
indirect materials - support production (cleaning)
What is the layout for production costing
Direct materials
+ Direct labour
+ Direct expenses
= PRIME COSTS
+ Production overheads
= PRODUCTION COSTS
+ other overheads
= TOTAL COSTS
What are cost behaviours
How costs can vary
What are the types of cost behaviour
- Variable costs
- Fixed costs
- Mixed/ semi variable costs
What are variable costs and the types
Change when activity changes
- total VC - increases
- unit VC - same
What are fixed costs and the types
Unchanged
- Total FC - same
- Unit FC - decreases and increase in units
What are mixed/ semi-varibale costs
- Semi VC - Both FC and VC
- Step FC - constant for different levels e.g 1000 chairs need inspection
What are relevant costs
Future costs changed by decisions e.g petrol
What are the types of relevant costs
- Opportunity costs
- Replacement cost
What are opportunity costs
Opportunity that is lost picking another item
WHat are replacement costs
Cost of buying substitute asset for current asset being used
What are sunk costs
Cost already incurred regardless of action
