ACCT 311 Lecture Notes - Lecture 1: Opportunity Cost, Linear Equation, Fixed Cost
25 Jun 2018
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Chapter 1: Managerial Accounting and Cost Concepts
Student Learning Outcomes:
•Define and illustrate various cost terms, concepts, and behaviors, and evaluate their
relevancy for different decision-making purposes.
•Distinguish between product and period costs and prepare and evaluate a Schedule of Cost of
Goods Manufactured, Schedule of Cost of Goods Sold, and Income Statement.
•Prepare traditional and contribution-margin income statements and define related terms.
Chapter Outline:
1. Cost Classifications for Assigning Costs
• Direct cost - cost that can be easily and conveniently traced to a
particular cost object
• Indirect cost - cost that cannot be easily and conveniently traced to a
particular cost object; common cost – a type of indirect cost that
belongs to, but is not individually traceable to, many cost objects
2. Product, Manufacturing, or Inventoriable Costs
• For a merchandising business, product costs or inventoriable costs
are the costs of buying a product that will be resold to customers
• For a manufacturing business, product costs, manufacturing costs, or
inventoriable costs are the costs of making a product
that will be held as inventory until it is sold to customers
• Product costs include:
– direct materials - materials that produce the final product which can be
physically and conveniently traced to the product
– direct labor (touch labor) - labor that can physically and conveniently traced to
the product
1. Cost classifications for assigning costs to cost objects
2. Manufacturing costs, product costs, and inventoriable costs
3. Non-manufacturing costs or period costs
4. Cost classifications for predicting cost behavior
5. The analysis of mixed costs
6. Traditional and contribution format income statements
7. Cost classifications for decision making
Prime costs
Conversion costs
find more resources at oneclass.com
find more resources at oneclass.com
–Manufacturing overhead - all costs of manufacturing except direct materials and direct
labor; includes indirect materials and indirect labor which cannot be easily
traced to the product, and includes other factory costs
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Student learning outcomes: define and illustrate various cost terms, concepts, and behaviors, and evaluate their relevancy for different decision-making purposes, distinguish between product and period costs and prepare and evaluate a schedule of cost of. Goods manufactured, schedule of cost of goods sold, and income statement: prepare traditional and contribution-margin income statements and define related terms. Direct particular cost object particular cost object; belongs to, but is not individually traceable to, many cost objects common. Product costs include: direct materials - materials that produce the final product which can be. Prime costs physically and conveniently traced to the product direct labor (touch labor) - labor that can physically and conveniently traced to the product. Period deliver the product or service to the customer business or selling costs - costs necessary to take customer orders and. Administrative costs - costs associated with the general management of the: cost classifications for predicting cost behavior.
