ACC 406 Chapter 2: Chapter 2 - Basic Managerial Accounting Concepts
8 Mar 2012
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Document Summary
Most important task of managerial accounting is to determine the cost of product, service, customers and other items of interest to managers. Ex: a small gourmet restaurant, the owner needs to understand the breakdown of the restaurants costs into various categories, cost categories include direct costs (food and beverages) and indirect costs includes laundry of linens. Amount of cash or cash equivalent sacrificed for goods and or services that are expected to bring a current or future benefit to the organization. Ex: if a furniture manufacturer buys lumber for , then the cost of lumber is . Ex: if the manufacturer trades office equipment at a value of for a forklift, then the cost of the forklift is which is the value of the office equipment. Cost is a dollar ($) measure of the resources used to achieve a given benefit. As costs are used up in the production of revenues, they are sold to expire.
