BU247 Lecture Notes - Lecture 2: Direct Labor Cost, Cost Accounting, Income Statement
Document Summary
Amount of money available after subtracting your variable costs. A factor, such as machine-hours, beds occupied, computer time, or flight-hours, that causes overhead costs. Direct labor + manufacturing overhead direct costs a. k. a. A report showing a comparison of projected and actual amounts for a specific period of time. A mathematical method that uses the total costs incurred at the high and low levels of activity to classify mixed costs into fixed and variable components. Step variable costs total cost remains constant within a narrow range of activity, total cost increases to a new higher cost for the next higher range of activity. Cost of goods sold equation: beginning inventory + net purchases - ending inventory. An income statement format that organizes costs by their behavior. Costs are separated into variable and fixed categories rather than being separated into product and period costs for external reporting purposes.
