Lecture 2 - Cost Behavior

Lecture 2 - Cost Behavior - Product Costs and Their...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
1 Product Costs and Their Behavior Objective: Understand . . . • That for decision making, what is important is how spending will change with – Increases or decreases in output – Adding or dropping a product line – Adding or dropping a department • The way we account for indirect costs contributes to decision-making confusion. • The “cost” of a product, department, piece of equipment, etc., depends on the intended use of the cost estimate. • There is no “true” cost. Cost Concepts Important vocabulary cost object direct costs indirect costs fixed costs variable costs product costs period costs normal (standard) cost overhead
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
2 Different Definitions of Product costs Research costs Mfg. costs Design costs Mktg. costs Distrib. costs Customer service costs Components of “product costs” Direct material Direct labor a.k.a. touch labor Indirect manufacturing costs (O/H) Factory costs May vary, but not necessarily directly with units of production Could categorize further into multiple
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 05/19/2008 for the course ACCT 2521 taught by Professor Basu during the Fall '07 term at Temple.

Page1 / 6

Lecture 2 - Cost Behavior - Product Costs and Their...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online