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Unformatted text preview: 1 Ch. 2 Concepts Managerial Accounting ADM 2341 Ch 2 . Cost terms and Concepts Direct Costs Indirect Cost Objects (Products Services Activities) Direct Tracing Driver Tracing Allocation Cost Assignment 2 Ch. 2 Concepts Managerial Accounting ADM 2341 Cost terminology Cost object: Any item for which individual costs are accumulated Direct Cost: traceable, economically feasible to trace Indirect cost: untraceable or too costly to trace Product cost: Any cost incurred to make or purchase goods(inventory cost) Period cost: Any cost taken directly to the income statement (not a product cost) 3 Ch. 2 Concepts Managerial Accounting ADM 2341 Full product costs: Manufacturer Direct Material Direct Labour Overhead Selling Administrative Product Costs (Inventory costs) Period costs (Non-inventory Costs) Full Product Cost 4 Ch. 2 Concepts Managerial Accounting ADM 2341 Full product costs: Merchandiser Merchandise Purchases Selling Administrative Product costs (Inventory costs) Period...
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- Winter '07