ACCT3023notes031711 - Week 2 – Thursday Homework pg 47...

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Unformatted text preview: Week 2 – Thursday, March 17, 2011 Homework: pg. 47- Questions 1 15 ( Due at the start of next class) pg. 47-50 – Multiple Choice 2-1 2-18 Chapter 2 – Basic Managerial Accounting Concepts • What is Cost? o Amount of cash or cash equivalent sacrificed for goods and/or service o What you pay for something as a manufacturer • Expenses: (Expired Cost) o As cost are used up in the production of revenues, they are said to expired I.e. When a product is shipped it becomes an expense. • Cost V. Price o Cost is what we pay to make it o Price is what we sell it for • Accumulating Cost o The way that cost is measured and recorded • Cost Objectives o Any items for which cost are measured and assigned I.e. Products, customers, departments • Assigning Cost o Where the cost is coming from and who is responsible for it. o I.e. Phone bill = 950, Sales is assigned $350 of it and Manufacturing is assigned $600 of it. o Cost can be assigned in a number of ways (methods will be covered in later chapters) o Some methods are more accurate, but time consuming I.e. Activity Based Costing o While others are quite simple but not as precise I.e. Traditional Costing Types of Cost • Direct Cost o Cost that can be easily measured and accurately traced to a cost object o Relationship between the cost and the object can be physically observed • Indirect Cost o Cost that cannot be easily traced to a cost object...
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ACCT3023notes031711 - Week 2 – Thursday Homework pg 47...

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