assignment # 4 definition of chapter 4

assignment # 4 definition of chapter 4 - Naiya Amin ACCT...

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Naiya Amin ACCT 3240*01WC Assignment # 4 Learning Objectives (Chapter 4) September 27 th 2010 LO1: Building-Block concepts of costing system discuss the cost object, direct costs of a cost object, indirect costs of a cost object, cost pools and cost-allocation bases. Cost Object: cost object is anything for which a measurement of costs is desired. For example a car such as the cost of servicing the car. Direct costs of a cost object: costs related to a particular cost object that can be traced to that cost object in an economically feasible way. Costs can be traced because making more computers directly causes more computer board costs to be incurred. Indirect costs of a cost objec t: costs related to a particular cost object that cannot be traced to that cost object in an economically feasible way. Indirect costs are allocated to the cost object using a cost allocation method. Cost pool: is a grouping of individual indirect cost items. Cost pools can range from broad to narrow. Cost pools are often organized in conjunction with cost-allocation bases.
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