Cost Assignment Chap 3 Flashcards
Job-ordering costing system
How costs are assigned to products in manufacturing firms that produce unique individual products or unique batches of products, and where the products or batches of products incur different costs
Direct cost tracing
A cost can be directly assigned to a cost object
Cost allocation
Assigning costs when the quantity of resources consumed by a particular cost object cannot be directly measured
Allocation bas or cost driver
The basis that is used to allocate costs to cost objects
Cause-and-effect allocations or driver tracing
Allocation bases are significant determinants of costss
Arbitrary cost
Cost allocation base is not significant determinant cost
Direct costing system
Assigns only direct costs to costs objects
Absorption costing system
Assign both direct and indirect costs to cost objects
Time sheets or job cards
Record time spent on providing a service to a specific customer or manufacturing a specific product
Materials requisition
Record details of the materials issued for manufacturing a product or providing a specific service
Cost centres or cost pools
A location to which overheads costs are initially assigned
