Cost Accounting Flashcards

Flashcards covering basic cost terminology and concepts from a cost accounting lecture.

What is a cost?

A sacrificed or forgone resource to achieve a specific objective.

What is an actual cost?

A cost that has occurred.

What is a budgeted cost?

A predicted cost.

What is a cost object?

Anything for which a cost measurement is desired.

What are direct costs?

Can be conveniently and economically traced (tracked) to a cost object.

What are indirect costs?

Cannot be conveniently or economically traced (tracked) to a cost object; instead, they are allocated.

What are variable costs?

Change, in total, in proportion to changes in the related level of activity or volume of output produced.

What are fixed costs?

Remain unchanged, in total, for a given time period, despite changes in the related level of activity or volume of output produced.

How do variable costs behave in total dollars?

Change in proportion with output.

How do fixed costs behave in total dollars?

Unchanged in relation to output.

How do variable costs behave per unit?

Unchanged in relation to output.

How do fixed costs behave per unit?

Change inversely with output.

When making decisions, should managers think in terms of unit costs or total costs?

Thinking in terms of total costs.