ACCT 2101 Chapter : ACCT 2101
Document Summary
8/26/2015 3:31:00 pm: provides useful information for management to make decisions. Revenue goes into retained earnings and into equity. Cost terminology and employees: direct- costs that can be traced or measure, indirect- costs that cannot easily be traced or are not worth tracing, variables- those that change in total, in direct proportion to changes in activity levels. Non-manufacturing- costs associated with running the business and selling the product: marketing and selling expenses, general and administrative expenses. Product- costs that are assigned to the product as it is being manufactured: also called inventoriable costs (capitalized asset as they occur- inventory; expensed at sale; cogs, product costs= dm used + dl + moh. Period- costs (non-manufacturing) that are expensed as they are incurred. No clear association with the timing of the making of the product. Relevant- cost that has the potential to influence a decision. Must occur in the future and differ between alternatives.
