Assignment # 3 (Chapter 2 Definition)

Assignment # 3 (Chapter 2 Definition) - Naiya Amin ACCT...

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Naiya Amin ACCT 3240*01WC Assignment # 3 September, 13 th 2010 Definitions: 1. Conversion Costs: Conversion Costs are also known as manufacturing costs other than direct material costs. Conversion costs represent all manufacturing costs incurred to convert direct materials into finished goods. For example, Conversion Costs = Direct Manufacturing labor costs + Manufacturing overhead costs Conversion cost are also direct and indirect expenditure incurred in converting a currency , material , or security from one form or type into another. Conversion cost of moving from one kind of equipment or production process to another. Conversion cost is high when converting from a manual system to a computerized system. It includes the cost of new equipment plus training. 2. Cost Allocation: Cost Allocation is a term that is used to describe the assignment of indirect costs to a particular cost object. Cost allocation is the assigning of a common cost to several cost objects. For example, a company might allocate or assign the cost of
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