Cost

Variable & Fixed Costs

Cost Driver

Variable cost - Lv of activity or volume

Fixed cost - no cost driver in ST; volume in LT

Variable that causes the cost to change

Relevant Range

a band of normal activity lv which ther's a specific re/ship b/w lv of activity & cost

can determine profitablity of @ pdt to decide which invest more resources

Manager should think in terms of total cost rather than Unit cost

Unit cost change when lv of pdn change from prior yr

Direct Costs

Cost Tracing

can be traced to a cost object in cost-effective way

Indirect Cost

Cost Allocation

Factors affecting Direct/Indirect cost Classification

Materiality of cost in Q

Available Info-gathering Tech

Design of Operations

Cost Object

Actual vs Budget cost

Purpose of using Cost info

Make decision

Implement decision by motivating staff to act & learn

How to determine cost of Cost Object

1. Cost acumulation

2. Assignement

Thing that the cost are attached to

Cost Pool

bucket' of cost that are to be applied tothe cost object