Intro Flashcards
(15 cards)
What are the functions of management accounting?
-Allocate costs between products sold and products unsold
-Provide relevant info to help managers make better decisions
-Provide info for planning, control, performance measurement and continuous improvement
What is a cost object?
A cost object is any activity for which separate measurement of cost is required
What is an indirect cost
cost that cannot be traced to an individual object
A direct cost
A cost that can be specifically and exclusively identified with a particular cost object
Prime cost equation
=direct labor cost + direct material cost + any other direct costs
Total cost
=Prime cost + Indirect costs(overheads)
How to record traditional costing systems
Direct materials :
Direct labor:
Prime materials :
Manufacturing overhead:
Total manufacturing cost:
Non-manufacturing overhead:
Total cost:
What are semi-fixed/stepped fixed costs?
fixed costs that increase at a certain volume
*usually the same thing, but stepped fixed costs after a certain volume jump to a new fixed level
What are semi-variable costs?
include both a variable and fixed component
Avoidable costs
are costs which can be saved by adopting a given alternative
Unavoidable costs
Costs which cannot be avoided
Product cost
a cost directly attributable to the product and would not be incurred if the product were not made
Period cost
a cost that is an expense at the time they are incurred, and would still be incurred if production temporarily stopped during that time
Relevant costs and revenues
Are those future costs which will change due to a decision
Irrelevant costs and revenues
costs and revenues will not be changed due to a decisions
