Unformatted text preview: is land that “depletes” over time, such as land from which minerals or oil are being
extracted. The complications associated with depletion are beyond the scope of this primer.
The cost of labor is measured by wages—either per unit of time (e.g., an hour) or per unit of activity (e.g., a
product, visit, flight, etc.). Short-lived capital—either mission or support—usually is measured in terms of the factor price per unit, i.e., what the organization paid to obtain the item. Long-lived capital typically is measured in
terms of depreciation per unit of time.
THE FULL COST ACCOUNTING METHODOLOGY
The conceptual framework in Exhibit 1-1 serves to put cost accounting into its broader economic context. Specifically, the principal objective of full cost accounting is to measure as accurately as possible the consumption of
David W. Young • Management Accounting for Managers • Chapter 1
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This document was uploaded on 03/30/2014.
- Spring '14