COST 2

Actual Cost - Cost incurred

Actual Cost -  also known as Historical Cost

Budgeted Cost - predicted or forecasted cost

Budgeted Cost - Also known as future cost

Cost Object - anything for which cost measurement is desired 

Cost Accumulation - Collection of cost data in some organized way by means of accounting system.

Direct Cost - are related to the particular cost object and can be traced to it in economically feasible way 

Indirect Cost - cost that cannot be traced to it in a =n economically feasible way 

Cost Tracing - assignment of direct cost in a particular cost object

Cost Allocation - assignment of indirect cost to a particular cost object 

Cost Assignment - ecompasses both tracing direct cost and allocating indirect cost.

Variable Cost and Fixed Cost - two basic types of cost behavior patterns.

Variable Cost - a cost that is constant in volume and varies in total

Fixed Cost - a cost that remains unchanged in total for a given time period

Cost Driver - level of activity or volume that casually affects cost over a given time span

Relevant range - band of range of normal activity level

Work in process inventory - goods partially worked on but not yet completed.

Finished Goods Inventory - goods completed, but not yet sold

Direcct Material Cost - acquisition cost of all materials that eventually become part of the cost object that can be traced economically

Direct Manufacturing Labor - include the compensation of all manufacturing labor that can be traced to the cost object economically

Indirect Manufacturing Cost - are all manufacturing cost that are related to the cost object, but cannot be traced to that cost object

Inventoriable Cost - all cost that are considered assets in a company balance sheet when the cost are incurred 

Cost of Goods Sold - Inventoriable cost that are sold and counted as expense 

Period Cost - all cost in the income statement other than cost of goods sold

Overtime Premium - is the wage rate paid to workers in excess of their straight time wage rates

Conversion cost = Direct Manufacturing Labor + Manufacturing overhead

Prime Cost - Direct Manufacturing Material + Direct Manufacturing Labor