《初级国际会计第二章全英文.ppt

CHAPTER 2 An Introduction to Cost Terms and Purposes Basic Cost Terminology Cost – sacrificed resource to achieve a specific objective Actual Cost – a cost that has occurred Budgeted Cost – a predicted cost Cost Object – anything of interest for which a cost is desired Basic Cost Terminology Cost Accumulation – a collection of cost data in an organized manner Cost Assignment – a general term that includes gathering accumulated costs to a cost object. This includes: Tracing accumulated costs with a direct relationship to the cost object and Allocating accumulated costs with an indirect relationship to a cost object Direct and Indirect Costs Direct Costs （直接计入成本）– CAN be conveniently and economically traced (tracked) to a cost object Indirect Costs （间接计入成本）– CANNOT be conveniently or economically traced (tracked) to a cost object. Instead of being traced, these costs are allocated to a cost object in a rational and systematic manner Cost Examples Direct Costs Parts Assembly line wages Indirect Costs Electricity Rent Property taxes Direct – Specific Indirect - Common Direct and Indirect Costs Several factors affect the classification of a cost as direct or indirect: The materiality of the cost in question Available information-gathering technology Design of operations Contractual arrangements The direct/indirect classification depends on the choice of the cost object. Direct and Indirect Costs The direct/indirect classification depends on the choice of the cost object. Example: Lee Xin Nutritious Food Ltd. Packaged Chicken Spicy Chicken Lemon Chicken Packaged Duck Baked Duck Pickled Duck Etc Both chicken and duck are raw materials for the two products. Direct and Indirect Costs The direct/indirect classification depends on the choice of the cost object. If spicy chicken and pickled duck are the cost objects, chicken and duck are ___ cost. However, If packaged chicken and packaged duck are the cost objects, chicken and duck are ___ cost. Read the example