Week 6- Cost Classification for Decision-making Flashcards
What are the main areas of management accounting?
1- Planning
2- Decision-making
3- Control
What is a cost object?
A cost object is anything for which costs can be ascertained, e.g, a unit of product, a unit of service
What is a cost unit?
A cost unit is the basic measure of product or service for which costs are determined
What is a cost centre?
A cost centre is a production or service location, a function, an activity or an item of equipment for which costs are accumulated.
What are product costs?
Product costs are those costs associated with goods or services purchased, or produced, for sale to customers.
What are period costs?
Period costs are those costs which are treated as expenses in the period in which they are incurred e.g. marketing department salaries.
