MAN ACCT
cost classifications
1. for assigning costs to cost objects 2. for manufacturing companies 3. for preparing financial statements 4. for predicting cost behavior 5. for making decisions
period costs
are all cows that are not product costs
direct materials
are those materials that become an integral part of the finished product and whose costs can be conveniently traced to the finished product
general administration of the organization ________
as a whole
when preparing a _______ and an _______, companies need to classify their costs as _______ or _______
balance sheet and an income statement product costs or period costs
raw materials may include ____________
both direct and indirect materials
direct labor
consists of labor costs that can be easily (i.e., physically and conveniently) traced to individual units of product
the term ____ is used to describe direct labor and manufacturing overhead because these costs are incurred to convert materials into the finished product
conversion costs
______ costs for different ______
different costs for different purposes
most manufacturing companies further separate their manufacturing costs into two direct cost categories ____ and ____, and one indirect cost category _____
direct materials and direct labor manufacturing overhead
administrative costs can be either _____ or _____
direct or indirect costs
selling costs can be either ____ or ____
direct or indirect costs
generally, costs are recognized as _____ on the income statement in the period that benefits from the cost
expenses
administrative costs
include all costs associated with the general management of an organization rather than with manufacturing or selling
product costs
include all costs involved in acquiring of making a product
selling costs
include all costs that are incurred to secure customer orders and get the finished product to the customer
a common cost is a type of
indirect cost
just like indirect materials, _______ is treated as part of _________
indirect labor, manufacturing overhead
manufacturing overhead includes items such as ____________________________________________________________________________
indirect materials; indirect labor; maintenance and repairs on production equipment; and hear and light, property taxes, depreciation and insurance on manufacturing facilities
direct costs
is a cost that can be easily and conveniently traced to specified cost object
indirect cost
is a cost that cannot be easily and conveniently traced to a specified cost object
common cost
is a cost that is incurred to support a number of cost objects but cannot be traced to them indicidually
cost object
is anything for which cost data are desired-including products, customers, jobs, and organizational subunits
conversion cost
is the sum of direct labor cost and manufacturing overhead cost
prime costs
is the sum of direct materials cost and direct labor cost
indirect labor
labor costs that cannot be physically traced to particular products or that can be traced only at great cost and inconvenience
indirect manufacturing cost, factory overhead, and factory burden are various names for
manufacturing overhead
only those costs associated with operating the factory are included in
manufacturing overhead
the _____ is based on the accrual concept that costs incurred to generate a particular revenue should be recognized as expenses in the same period that the revenue is recognized
matching principle
indirect materials
materials such as solder and glue are included as part of manufacturing overhead
these selling costs are sometimes called ____ and _____
order-getting and order-filling costs
the unexpended portion of the insurance payment is carried on the balance sheet as an asset is called
prepaid insurance
inventoriable costs
products costs are initially assigned to inventories
the finished product of one company can become ______ of another company
raw materials
all ___ and ___ are treated as period costs
selling and administrative expenses
non manufacturing costs are often divided into two categories ______ and ________
selling costs and administrative costs
to be traced to a cost object such as a particular product _________________
the cost must be caused by the cost object
raw materials
the that go into the final product
manufacturing overhead
the third manufacturing cost category, includes all manufacturing cows except direct materials and direct labor
whats the reason for so many types of cost
these costs are classified differently according to the immediate need of management
direct labor is sometimes called ____ because __________
touch labor because direct labor workers typically touch the product while it is being made
