Cost 1 def

Cost 1 def - Cost: sacrificed resource to achieve a...

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Cost : sacrificed resource to achieve a specific objective Actual Cost : cost that has occurred, historical, past Budgeted Cost : a predicted cost, future Cost Object : anything of interest for which a cost is desired Cost Accumulation : collection of cost data in an organized manner, by accounting system Cost Assignment : general term that includes gathering accumulated costs to cost object: relationship with tracing direct & allocating indirect costs Direct Cost Indirect Cost : cannot be conveniently/economically traced to a cost object, costs that allocated to a cost object in a rational way Variable Cost : changes in total cost in proportion to changes in the related level of activity or volume, per unit unchanged Fixed Cost : remain unchanged in total regardless of changes in the related level of activity or volume, per unit inversely output Cost Driver : variable that causally affects costs over given time span Relevant Range Manufacturing Companies Merchandising Companies : product resellers Service Companies : proved services Direct Materials Inventory Work in Process Inventory : products started but not yet completed, WIP Finished Goods Inventory Direct Material Costs Direct Labor Costs Indirect Manufacturing Costs : factory costs that are not traceable to the product Manufacturing Overhead, Factory Overhead Inventoriable Costs Period Costs Prime Costs Conversion Costs Overtime Labor Costs : considered part of overhead due to the inability to precisely know the true cause of these costs Pricing and product-mix decisions: may use a “super” cost approach (comprehensive) total
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This note was uploaded on 10/27/2011 for the course ECON 101 taught by Professor Womer during the Spring '08 term at NYU.

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Cost 1 def - Cost: sacrificed resource to achieve a...

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