ACC 406 Chapter Notes - Chapter 2: Opportunity Cost, European Cooperation In Science And Technology, Income Statement

• School: Ryerson University
• Department: Accounting
• Course: ACC 406
• Professor: All Accounting410

Document Summary

Costs is the amount of cash sacrificed for goods / services that are expected to bring current or future benefit. The price the consumer pays must be greater than the cost it takes the company to produce the good / service. Accumulating cost is the way that costs are measured and recorded. Lets the company know how much they spend on what. Assigning costs is the way that costs are liked to cost object. Cost objects are any item such as a product, customer, department, project, geographic region, plant etc. Includes both direct + indirect costs that are caused from this cost object, even opportunity costs. Direct costs are those costs that can be easily and accurately traced to a cost object. The more easily a cost can be traced to the object, the more accurate are the cost assignments. Indirect costs are costs that cannot be easily and accurately traced.