ACC 202 Lecture Notes - Lecture 1: Indirect Costs, Financial Statement, Opportunity Cost
30 Aug 2017
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Is concerned with reporting financial information to external parties, such as stockholders, creditors, and regulators. Is concerned with providing information to managers within an organization so that they can formulate plans, control operations, and make decisions. Cannot trace how many property taxes go into each of these products: allocate the cost/assign them by coming up with logic way, examples: manufacturing overhead, matince on equipment, common costs. Indirect costs incurred to support a number of cost objects. These costs cannot be traced to any individual cost object: accounting for costs in manufacturing companies, preparing financial statements, predicting cost behavior in response to changes in activity, making decisions. These costs cannot be easily traced to finished product. Also include indirect materials and indirect labor. (rent space, security guards, matinee, etc. ) Prime costs: direct labor and direct material. Conversion costs: manufacturing overhead and direct labor.
