AFM481 Chapter Notes - Chapter 2: Management Accounting, General Ledger, Fixed Cost
14 May 2019
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Cost accumulation: accumulation of actual cost data in an organized way: accumulated cost = cost pools, different than financial statement general ledger accounts b/c costs in gl are for. Similar transactions, but cost pools are costs from different transactions: ex. Cost pool = material/labour costs for a cost object: production, advertisement, etc, cost object: product lines. Cost allocation/assignment: links a pool of acutal costs to a distcint cost object. By traceability - (eg direct or indirect costs) . How much cost is linked to this product: see how many people are working on the chairs product line, know weight of plastic. Indirect cost/overhead: whatever costs you cannot specifically trace. By gaap - (eg period and product costs: product cost/inventoriable cost: anything that can bring future value to us, period cost: operating expenses/selling admin expenses, not cogs, associate with certain period of time, ex. When its gone, it"s gone: ceo salary, labour can be period or product.
