Silver_Scotty_ABC project

Silver_Scotty_ABC project - COSTOBJECT Whatisacostobject ,...

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COST OBJECT What is a cost object? According to Eldenburg and Wolcott, a cost object is a thing or activity for which  we measure costs (39). He further added that cost objects include things such as  individual products, product lines, projects, customers, departments and even the entire  company. Costs objects are cost based on their cost drivers. Eldenburg and Wolcott states  a cost driver to be some input or activity that causes changes in total cost for a cost  object.  The cost of an object can be calculated with the following equation:   Direct Cost (Labor, Material)  + Overhead Cost                Total Object Cost
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COST DRIVER There are basically three types of cost drivers: Volume: The cost driver is based on units of work (e.g., number of orders.)  The cost of the  activity increases as more units are processed.
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This note was uploaded on 02/20/2012 for the course H/A 121 taught by Professor Alamo during the Spring '12 term at Morgan.

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Silver_Scotty_ABC project - COSTOBJECT Whatisacostobject ,...

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