ACCT208 Lecture Notes - Lecture 1: Income Statement, Cost Driver, Matching Principle

• School: University of Delaware
• Department: Accounting
• Course: ACCT208
• Professor: Deb Dragone

Document Summary

Cost classifications for assigning costs to cost objects. What is a cost object anything for which cost data is required. Direct costs: easily traced to the cost object. Indirect costs/common cost: cannot be easily traced to the cost object/the cost is incurred to support many cost objects only at great cost. Cost classifications for manufacturing and service companies using gaap. Understanding cost concepts in relation to financial statements. Product costs: all costs for acquiring, making, or performing a product/service. Dm (direct material): direct cost, can be easily traced to the product and is an integral part of the product/service. Conversion costs: it takes dl and oh to convert dm into finished product/service. Oh (overhead): indirect cost, all service or factory costs except. A lot of these type of costs, sometimes grouped together. Indirect material and indirect labor (security, janitors, etc. ) and other (insurance, rent, depreciation, etc. )