GEOLOGY 002 Lecture Notes - Lecture 26: Indirect Costs, Variable Cost, Cost Driver
Document Summary
Chapter 2: an introduction to cost terms and purposes. A cost is a resource sacrificed or forgone to achieve a specific objective. A cost object is anything for which a separate measurement of costs is desired. Cost accumulation is the collection of cost data in some organised way through an accounting system. Cost assignment is a general that encompasses both tracing accumulated to a cost object, and allocating accumulated costs to a cost object. Actual cost are cost incurred, as distinguished from budgeted or forecasted costs. Direct cost of a cost object: costs that are related to the particular cost object and that can be traced to it in an economically feasible way. Indirect costs of a cost object: costs that are related to the particular cost object but cannot be traced to it in an economically feasible way. Indirect costs are allocated to the cost object using a cost-allocation method.
