ACC 410 Chapter Notes - Chapter 4: Timesheet, Total Absorption Costing, Income Statement

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The chapter includes descriptions of how managers need to rely upon different classifications of costs for different purposes. This chapter emphasizes four main purposes of cost classification: For preparing external reports such as the balance sheet and income. To predict cost behaviour how costs will react to changes in activity. For purposes of assigning costs to cost objects such as products or statement. departments. Underapplied or overapplied overhead costs are closed to the appropriate accounts. Two major types of costing systems are used in manufacturing and many service firms: process costing and job-order costing: process costing. A process costing system is used where a single, homogeneous product or service is produced. In a process costing system, total manufacturing costs are divided by total number of units produced during a given period. The unit cost that results is a broad, average figure.

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