33:010:275 Lecture Notes - Lecture 1: Cost Driver, Fixed Cost, Finished Good
14 Jul 2017
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Document Summary
Budgeted cost- a forecasted cost (a future cost) This data is then used in decision making and decision implementing. Cost tracing: the assignment of direct costs to a specific cost object. Direct cost: the cost of tires, cost of the steering wheel. Chapter 2; an introduction to cost terms and purposes. Cost object- anything for which a cost measurement is desired. Cost system has two parts: cost accumulation- collecting cost data in an organized way, accumulated costs are then assigned to specific cost objects. Direct costs of a cost object- related to cost object and can be traced to cost object in an economic way. Indirect cost of a cost object- related to cost object but cannot be traced in an economic way. Cost system: accumulating costs and then assigning costs. It is important that assigning costs to cost objects is done accurately. Cost pool: collection of indirect costs assigned to a cost object.
