Accounting - Cost Object Measures Cost
Essay by Maria de Figueiredo • January 27, 2019 • Coursework • 281 Words (2 Pages) • 486 Views
Acct:
Cost object: measures cost (anything to which you can assign a cost)
- Certain customers drive more profit than others
- Acquiring costs
- Direct costs: easily traced to a cost object
- Aluminum used to produce product
- Indirect costs: not easily traced to cost object
- Factory manager’s salary
- Product costs: manufacturing costs capitalized to company’s inventory account
- Expensed through COGS when inventory is sold
- 3 types of product costs:
- Direct Materials:
- The raw materials used to create the product
- Direct Labor
- Labor that built the product (touch labor)
- Some companies don’t include overtime- moved to manufacturing/overhead
- Manufacturing overhead
- All other manufacturing costs (indirect materials, indirect labor, insurance utility etc)
- Technology= direct labor cost decreases and manufacturing overhead increases
- Period cost: do not pertain to manufacturing and are not capitalized to the company’s inventory account
- Expensed as they are incurred
- Selling costs/administrative costs
- Prime cost = direct materials + direct labor
- Conversion cost = direct labor + manufacturing overhead
Raw materials-> WIP -> finished goods inventory (once sold=COGS)
...
...
(2019, 01). Accounting - Cost Object Measures Cost. Essays24.com. Retrieved 01, 2019, from https://www.essays24.com/essay/Accounting-Cost-Object-Measures-Cost/88182.html
"Accounting - Cost Object Measures Cost" Essays24.com. 01 2019. 2019. 01 2019 <https://www.essays24.com/essay/Accounting-Cost-Object-Measures-Cost/88182.html>.
"Accounting - Cost Object Measures Cost." Essays24.com. Essays24.com, 01 2019. Web. 01 2019. <https://www.essays24.com/essay/Accounting-Cost-Object-Measures-Cost/88182.html>.
"Accounting - Cost Object Measures Cost." Essays24.com. 01, 2019. Accessed 01, 2019. https://www.essays24.com/essay/Accounting-Cost-Object-Measures-Cost/88182.html.