Cost Accounting

three different types of inventory that manufacturing companies hold

direct materials, work-in process, finished goods

cost allocation

used to describe the assignment of indirect costs to a particular cost object

indirect costs

costs that are allocated to the cost object (manufacturing overhead)

direct costs

costs that are traced to the cost object (direct material, direct labor)

cost accumulation

the collection of cost data in some organized way by means of an accounting system

cost object

A cost object is anything for which a separate measurement of costs is desired. Examples include a​ product, a​ service, and a customer.

cost assignment

a general term that encompasses both tracing direct costs to a cost object and allocating indirect costs to a cost object

budgeted cost

a predicted cost

period costs

all costs in the income statement other than cost of goods sold. Period costs are treated as expenses of the accounting period in which they are incurred because they are expected to not benefit future periods.

Inventoriable costs

all costs of a product that are considered as assets in the balance sheet when they are incurred and that become cost of goods sold when the product is sold.

manufacturing overhead cost

all manufacturing cost related to the cost object but cannot be traced to the cost object

direct manufacturing labor cost

compensation of all manufacturing labor that can be traced to the cost object

actual cost

cost incurred

direct materials cost

cost of all materials that can be traced to the cost object