0324660138_147569 - Cornerstones of Managerial Accounting,...

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Cornerstones of Managerial Accounting, 3 rd edition Mowen/Hansen/Heitger Chapter 2 Learning Objectives LO1 . Explain the meaning of cost and how costs are assigned to products and services. Cost is the cash or cash-equivalent value sacrificed for goods and services that are expected to bring a current or future benefit to the organization. Managers use cost information to determine the cost of objects such as products, projects, plants, and customers. Direct costs are traced to cost objects based on cause-and-effect relation ships. Indirect (i.e., overhead) costs are allocated to cost objects based on assumed relationships and convenience. LO2. Define the various costs of manufacturing products and providing services as well as the costs of selling and administration. Products are goods that either are purchased or produced by converting raw materials through the use of labor and indirect manufacturing resources, such as plants, land, and machinery. Services are tasks performed for a customer or
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0324660138_147569 - Cornerstones of Managerial Accounting,...

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