Quiz 1 Flashcards
Cost
Resource sacrificed or foregone to achieve some objective
Cost object
Anything whose cost we wish to measure
Cost measurement
Determining the level of cost incurred by a cost object and assigning s value to them
Direct cost
Cost that can be measured
Indirect cost
Cost that cannot feasibly be measured
Inventoriable costs
Costs that are recognized as assets when incurred and expenses as cogs when sold
Manufacturing overhead
Product costs that are inventoriable but not economically feasible to trace to inventory units
Product cost
Incurred to MOH. They are initially recognized as an asset and are then expensed on sale of product
Period cost
All costs on the income statement other than COGS
3 types of inventories
Materials, WIP, FG
Variable costs
Changes with the level of production
Fixed cost
Stays the same regardless of level of production
Relevant cost
Costs that differs between alternatives
Sunk cost
A cost that has already been incurred and is irrelevant for decision making
Opportunity cost
The value of a foregone opportunity relative to the value of the chosen course of action
