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actual cost

the actual cost incurred. so the historical or past cost of a product

cost object

anything where you can trace the cost that it is incurring

cost accumulation

a systemic way of adding up all of the costs

difference between direct and indirect costs

a direct cost can be traced to the object and an indirect cost cannot

Cost driver

anything that radically effects cost. Usually a variable cost but can be a fixed cost if it is over a long time span

price per unit calculation

total manufacturing cost/ number of units manufactured

unit cost=

average cost

total manufacturing cost=

COGS+ ending inventory

direct material costs

how much it costs to obtain all of the materials

direct manufacturing costs

wages of assembly line workers working on the cost objects

indirect manufacturing costs

related to producing the cost object but cannot be traced in an economically feasible way -- also called overhead costs

overhead costs

indirect manufacturing costs

period costs

all costs in income statement besides COGS of production costs

direct material costs=

begging inventory+ direct material purchases-ending inventory= direct material costs

total manufacturing costs=

direct materials used+direct manufacturing labor+manufacturing overhead costs

cost of goods manufactured

cost of goods brought to completion. So the cost of just the total produced finished goods total manufacturing costs-wip= cogm


begging inventory+cogm - ending inventory of finished goods

gross margin=


operating income=

total revenue for operating - cogs - operating period costs

prime costs

all direct manufacturing costs (direct material + direct manuf labor)

conversion costs

all manufacturing costs that are not direct materials. It represents all costs incurred while converting materials into a final good

over time cost type and idle time

usually indirect cost or overhead

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