16-4 - i. Accurate 1. Not precision ii. Timely 1. Available...

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January 22, 2009 Lecture 2 I. Goals for the class a. Define what a cost object is and how direct/indirect costs relate to cost objects b. Differentiate between product costs and period expenses c. Explain how product costs go from one account to another in a manufacturing environment d. Show how cost information is used in/on balance sheets and income statements II. How much does this cost? a. Decisions that require cost information i. How steeply to discount a product/service (pricing) ii. Product mix (keep or drop) iii. Outsourcing (manage data, production) iv. Lay offs b. Essential information is…
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Unformatted text preview: i. Accurate 1. Not precision ii. Timely 1. Available when needed iii. Useful 1. Only what is needed c. Cost object i. Anything for which you want cost info 1. Activity, department, customers, products d. Direct v indirect costs i. Direct 1. Easily observed ii. Indirect 1. Not easily observed, often shared with other cost objects III. Product Costs v Period Costs (organizing cost info by function) a. Function i. What the cost is for b. Product costs are inventoriable i. Recorded as inventory until the product is sold...
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This note was uploaded on 04/18/2011 for the course BUS 203 taught by Professor Keenan during the Winter '09 term at Indiana.

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16-4 - i. Accurate 1. Not precision ii. Timely 1. Available...

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