ACC 202 Chapter Notes - Chapter 1: Management Accounting, Accounts Receivable, Fixed Cost
Document Summary
Costs are classified with externally imposed rules to enable the preparation of financial statements. Assign costs to segments of the business (product lines, geographic regions, and distribution channels) Properly contrast the costs associated with competing alternatives. Financial accounting: concerned w/ reporting to external parties. Managerial accounting: concerned w/ providing information to managers within an organization (internal parties) Costs are classified in diverse ways that enable managers to. Accounting for costs in manufacturing companies (manufacturing/nonmanufacturing costs) Predicting cost behavior in response to changes in activity (variable/fixed/mixed cost) Cost object: anything for which cost data are desired. Direct cost: a cost that can be easily and conveniently traced to a specific cost object. Indirect cost: a cost that cannot be easily and conveniently traced to a specific object. Raw material: the materials that go into the final product (any materials used in final product)
