Topic_9_Management_Accounting_Flashcards
(10 cards)
What is the difference between product and period costs?
Product costs are tied to production and inventoried; period costs are expensed when incurred.
What is a direct cost?
A cost that can be traced to a specific segment, like labor or materials.
What is an indirect cost?
A cost shared across segments, like factory rent or supervisor salary.
What are fixed costs?
Costs that remain unchanged with production volume (e.g., rent).
What are variable costs?
Costs that vary with production volume (e.g., materials).
What is a sunk cost?
A past cost that cannot be recovered and should not affect future decisions.
What is an opportunity cost?
The benefit lost by choosing one alternative over another.
What is a differential cost?
A cost that differs between decision alternatives.
Why can a cost be direct in one context and indirect in another?
It depends on the decision object or scope of analysis.
Why is management accounting a competitive tool?
It provides internal data for better planning, control, and evaluation.
