Task 3 Flashcards
(36 cards)
What is cost accounting?
, recording, and reporting costs of products or services.
What is a cost?
economic sacrifice of resources to achieve a specific purpose
Can a cost be something other than an expense?
Yes, a cost doesn’t always lead to an expense immediately.
What is a cost object?
Anything for which costs are measured and assigned .
What are the three components of manufacturing costs?
Direct materials, direct labour, and manufacturing overhead
What are non-manufacturing costs?
All costs not directly involved in manufacturin
What are direct materials?
Raw materials directly traceable to the product (e.g., fabric for clothing).
What are indirect materials?
Raw materials not directly traceable to a single product; part of overhead (e.g., glue, thread).
What is direct labour?
Labour costs traceable to the finished product.
What is indirect labour?
Labour not easily traced to the product (e.g., cleaners, supervisors).
What are manufacturing overheads?
Indirect costs of production (e.g., utilities, depreciation, factory maintenance).
What is a variable cost?
Cost that changes with production level (e.g., raw materials).
Give examples of variable costs.
Raw materials, direct wages, commissions, cost of goods sold.
What is a fixed cost?
Cost that remains constant regardless of activity (e.g., rent).
What is a mixed cost?
Contains both fixed and variable components (e.g., phone bill).
Give examples of mixed costs.
Utilities, telephone, vehicle rental, water rates.
: What is a direct cost?
Cost directly traceable to a product/service (e.g., raw materials, mechanic’s wages).
What is an indirect cost?
Cost not easily traceable to one product (e.g., factory manager’s salary, oil for machines).
What is a product cost?
Cost recorded as an expense when the product is sold (e.g., direct materials, overheads).
What is a period cost?
Cost expensed in the period incurred (e.g., advertising, office rent).
What is a sunk cost?
Past cost that cannot be recovered or changed.
What is a relevant cost?
Future cost relevant to a decision.
What is job order costing?
Tracking costs for a specific product/service or custom order.
What is normal costing?
Uses actual direct materials/labour and predetermined overhead rates.
