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  • 320d3e7e-a8b4-4757-8ac3-30fe5f30228a

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    jao jao
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    This document defines and classifies various cost concepts. It discusses controllable costs, relevant costs, incurred costs, and opportunity costs. It also covers budgeted costs, standard costs, discretionary fixed costs, period costs, inventoriable costs, capital assets, avoidable costs, prime costs, conversion costs, and variable production costs. The document provides definitions for each cost concept to help explain their nature and use for managerial decision making and accounting purposes.

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    This document defines and classifies various cost concepts. It discusses controllable costs, relevant costs, incurred costs, and opportunity costs. It also covers budgeted costs, standard costs, discretionary fixed costs, period costs, inventoriable costs, capital assets, avoidable costs, prime costs, conversion costs, and variable production costs. The document provides definitions for each cost concept to help explain their nature and use for managerial decision making and accounting purposes.

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    © All Rights Reserved
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    7 views3 pages

    320d3e7e-a8b4-4757-8ac3-30fe5f30228a

    Uploaded by

    jao jao
    This document defines and classifies various cost concepts. It discusses controllable costs, relevant costs, incurred costs, and opportunity costs. It also covers budgeted costs, standard costs, discretionary fixed costs, period costs, inventoriable costs, capital assets, avoidable costs, prime costs, conversion costs, and variable production costs. The document provides definitions for each cost concept to help explain their nature and use for managerial decision making and accounting purposes.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 3

    Strat Cost-Cost Concepts and Classifications

    Study online at https://quizlet.com/_aacrjj

    1. Controllable Costs Its incurrence depends on the decision of the man-


    ager.

    2. Relevant Costs Used in making a decision.

    3. Incurred Costs Mostly referred to as a sunk cost or past cost.

    4. Irrelevant Cost A past cost, unalterable, and unavoidable

    5. Opportunity Cost / Im- A theoretical cost


    puted Cost

    6. Opportunity Costs A benefit given up in favor of the benefit received.

    7. Opportunity Costs Income sacrificed in lieu of the decision made.

    8. Avoidable Costs A saving generated in favor of the decision made.

    9. Opportunity Cost / Im- Costs that are not recognized in the financial ac-
    puted Costs counting records and reports.

    10. Controllable Costs Costs which incurrence or non-incurrence depends


    on the decision of the responsible manager.

    11. Common Costs These are normally allocated and unavoidable


    costs.

    12. Common Costs Costs found in all business segments.

    13. Joint Costs Costs found in common operational process need-


    ed to be allocated over the units being produced.

    14. Out-of-pocket Costs Costs paid in cash when incurred.

    15. Planned Costs Costs used for planning purposes.

    16. Budgeted Costs Costs that re projected in a given activity.


    Estimated Costs
    Planned Costs
    Standard Costs
    1/3
    Strat Cost-Cost Concepts and Classifications
    Study online at https://quizlet.com/_aacrjj

    17. Budgeted Costs Costs that are projected and are used in planning a
    specific level of activity.

    18. Planned Costs It refers to either estimated costs or budgeted costs.

    19. Standard Costs Estimated costs at a given level of actual or varying


    level of activity.

    20. Standard Costs Costs reportedly used in a given actual level of


    activity.

    21. Standard Costs These are established based on scientific and em-
    pirical processes and are accepted for planning and
    control purposes

    22. Discretionary fixed Research and development, executive training, ad-


    costs vertising costs.
    Period Costs

    23. Standard Costs Sometimes referred to as flexible costs.

    24. Budgeted Costs Sometimes referred to as the master budget,

    25. Conversion Costs Salaries, depreciation, and utilities expenses


    Period Costs

    26. Inventoriable Costs Costs identified with the production activities.


    Product Costs

    27. Inventoriable Costs It relates with the product and follows the unit being
    Product Costs produced

    28. Period Costs It is automatically expense when incurred.

    29. Period Costs It does not relate with the production activities and
    are expensed in the time they are incurred.

    30. Inventoriable Costs Direct materials, direct labor and production over-
    Product Costs head

    2/3
    Strat Cost-Cost Concepts and Classifications
    Study online at https://quizlet.com/_aacrjj
    31. Capital Assets Costs incurred to generate measurable and prob-
    able future benefit to business operations in more
    than a year.

    32. Avoidable Costs A saving generated from avoiding an alternative


    course of action

    33. Prime Costs Direct Materials and Direct Labor

    34. Conversion Costs Direct labor and overhead

    35. Variable Production Direct materials, direct labor, and variable over-
    Costs head.

    3/3

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