Chapter 2 managerial accounting and cost concepts. This notion of different costs for different purposes is a critically important aspect of managerial accounting. Cost classifications: for assigning costs to cost objects, for manufacturing companies, for preparing financial statements, for predicting cost behavior, and for making decisions. Cost classifications for assigning costs to cost objects. Cost object- anything for which cost data are desired, including products, customers, jobs, and organizational subunits: direct cost. Cost that can be easily and conveniently traced to a specified cost object. Cost that cannot be easily and conveniently traced to a specified cost object. To be traced to a cost object such as a particular product, the cost must be caused by the cost object. Common cost- a cost that is incurred to support a number of cost objects but cannot be traced to them individually. Cost object: examples include chicken noodle soup and the entire manufacturing division.