Term
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Definition
| A resource sacrificed or forgone to achieve a specific objective. May be capitalized (not expensed, turned into asset) |
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Term
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Definition
| A parameter for defining costs: Product, Store, Division, Company. Ex: If cost object is product, store supervisor salary is an indirect cost, if cost object is the store, store supervisor salary becomes a direct cost |
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Term
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Definition
| A cost that are incurred for a particular cost object and can be traced to that specific cost object |
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Term
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Definition
| Costs that are incurred to support a cost object but cannot be totally traced to a specific cost object, must be allocated |
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Term
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Definition
| A cost that varies with units of production. Ex: Cheese costs $1.00 PER Pizza. Total cost changes with volume, cost per unit remains constant |
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Term
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Definition
| A cost that doesn't change with changes in activity or volume. |
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Term
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Definition
| The range over which relationships remain constant, considered the range of volume or activity that can be sustained without changing capacity (of production). Essentially, all variables except for Units remains constant. |
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Term
| Inventoriable (Product) Costs |
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Definition
| All costs of a product that are regarded as an asset, these costs are capitalized until asset is sold, at which point they are expensed. (Would the cost disappear if product was not produced) |
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Term
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Definition
| Costs that are expensed in the period in which they are incurred. Costs that are expected to benefit revenues. Key Q: Would cost be incurred despite ceasing production |
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Term
| Service Firm (types of firms) |
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Definition
| A firm that sells services to the public and do not maintain an inventory. |
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Term
| Merchandising Firm (types of firms) |
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Definition
| A firm that sells products produced by a different company(ies), maintain an inventory of products for resale. |
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Term
| Manufacturing Firm (types of firms) |
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Definition
| Produce and sell said products, maintain three (3) inventories; materials, WIP, and finished goods. |
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Term
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Definition
| The direct cost of raw materials used in the production of products |
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Term
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Definition
| These are the wages of those employed specifically for producing products. |
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Term
| Indirect Manufacturing Costs |
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Definition
| (Overhead) These are the indirect costs that were incurred to produce the product |
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Term
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Definition
| Direct Manufacturing Costs: Direct Materials and Direct Labor |
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Term
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Definition
| The costs incurred to convert raw materials into finished goods: Direct Labor and Overhead |
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