But often are charged to expense immediately A cost can be classified in many

But often are charged to expense immediately a cost

This preview shows page 27 - 46 out of 92 pages.

But often are charged to expense immediately.
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A cost can be classified in many different ways. An adjective is used to describe costs (i.e., to signify their purpose). For Managerial Accounting:
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The benefit given up or sacrificed when one alternative is chosen over. Another. Opportunity Cost
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Manufacturing/ Nonmanufacturing Costs Period/Product Costs Fixed/Variable Costs Other Adjectives . . .
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Selling/Administrative Costs Differential Cost Sunk Cost Other Adjectives . . .
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Relevant Costs Any cost that is a future future cost Any cost that differs among differs among alternatives alternatives and will influence the outcome, Any cost that is avoidable avoidable
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Avoidable Cost A cost that can be eliminated (in whole, or in part) as a result of choosing one alternative over another.
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Sunk Costs . . . Costs that have been incurred or committed in the past. Sunk costs are irrelevant because the decision maker no longer has discretion over them.
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Issues in Managerial Accounting Mgmt. Acct. Yeah! A look at managerial accounting issues!
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Direct Materials Direct Materials Direct Labor Direct Labor Mfg. Overhead Mfg. Overhead Work-in- Process Work-in- Process Finished Goods Finished Goods Cost-of Goods Sold Cost-of Goods Sold Cost Measurement Cost Accumulation Cost Assignment Goal: Accurately costed products.
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Mgmt. Acct. Cost Measuremen t
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Actual Costing System Normal Costing System Standa rd Costing System Measuring Costs
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Measuring Costs Actual Costing System Normal Costing System Standa rd Costing System Costs charged to production : 1.Actual Direct Materials 2.Actual Direct Labor 3.Actual Manufacturing Overhead
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Direct Materials Direct Materials Direct Labor Direct Labor Mfg. Overhead Mfg. Overhead Work-in- Process Work-in- Process Finished Goods Finished Goods Cost-of Goods Sold Cost-of Goods Sold Cost of Goods Sold Cost of Goods Sold Nonmanufacturing Expenses Nonmanufacturing Expenses Sales - = Gross Margin - Net Income = Income Statement Sold P r o d u c t C o s t s Period Costs Goal: Accurately costed products Timeliness is critical
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Measuring Costs Actual Costing System Normal Costing System Standa rd Costing System Costs charged to production : 1.Actual Direct Materials 2.Actual Direct Labor 3.Estimated Manufacturing Overhead Let’s look at this.
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Budgeted Overhead POR = --------------------------------------- Budgeted Activity Usage Predetermined Overhead Rate (POR) Estimate d Overhead Estimate d Activity Base
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Direct Materials Direct Materials Direct Labor Direct Labor Mfg. Overhead Mfg. Overhead Work-in- Process Work-in- Process Finished Goods Finished Goods Cost-of Goods Sold Cost-of Goods Sold Cost of Goods Sold Cost of Goods Sold Nonmanufacturing Expenses Nonmanufacturing Expenses Sales - = Gross Margin - Net Income = Income Statement Sold P r o d u c t C o s t s Period Costs Goal: Accurately costed products Timeliness is critical
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Measuring Costs Actual Costing System Normal Costing System Standa rd Costing System Costs charged to production : 1.Standard Direct Materials 2.Standard Direct Labor 3.Standard
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Direct Materials Direct Materials Direct Labor Direct Labor Mfg.
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