COMM-2016EL Study Guide - Midterm Guide: Indirect Costs, Pro Rata, Income Statement

• School: Laurentian
• Department: Commerce and Administration
• Course: COMM-2016EL
• Professor: Kayla Levesque

Document Summary

Cost object anything for which a separate cost is desired! Cost accumulation collection of cost data in an organized way through the. Cost assignment general term related to how accumulated costs are assigned to accounting system. cost objects. Done in 2 ways: assigning accumulated costs to a cost object allocating accumulated costs to a cost object (1) (2) Direct cost cost related to a cost object and can be traced in an economically feasible manner. Indirect cost cost related to a cost object but cannot be traced in an economically feasible way. Indirect costs are allocated to a cost object using some method of allocation. This involves a mathematical proration of some type! It depends on: size of the cost, available technology, design of operations, contractual arrangements. Note: if cost not traced directly, then cost will be totaled and allocated (likely at the end of a month) to the cost object.