Cost terms concepts and classifications
Cost terms concepts and classifications are cost is defined as price of any object. Cost terms include direct & indirect cost, fixed & variable costs. Cost is classified as direct & indirect material, direct & indirect labor which also includes factory overhead.
Total Factory Cost Definition: Total factory cost is equal to total direct materials cost plus direct labor cost plus Factory overhead. Formula of prime cost can be written as: Prime cost = Direct materials + Direct labour
Top Managers Definition: Managers at or near the top level of the organization who are responsible for making organization-wide decisions and establishing the goal and plans that effect the entire organization. Recommended Books ! Or Download E accounting book in MS-word format for just
Time Ticket Definition: Time ticket is a detailed source document that is used to record an employee’s hour-by-hour activities during a day.
Time-Adjusted Rate of Return Definition: This term is synonymous with internal rate of return.
Throughput Time Definition: The time required to make a completed unit of product starting with raw materials. Throughput time is also known as cycle time.
Theory of constraints (TOC) Definition: Theory of constraints (TOC) management approach that emphasizes the importance of managing constraints. This is only definition of theory of constraints (TOC). Click here to read full article about theory of constraints (TOC) Relevant term: Bottleneck
Technical Skills Definition: Technical skills include knowledge of and proficiency in certain specialized field, such as engineering, computers, accounting, or manufacturing. These skills are more important at lower level management since these managers are dealing directly with employees doing the organizational work. Relevant terms:
Quantitative Approach Definition: The quantitative approach involves the use of quantitative techniques to improve decision making. This approach is also called operations research or management science.
Mixed Cost or Semi-variable Cost: Learning Objective of this Article: Define and explain mixed or semi-variable cost. Give examples of mixed costs. Analyze mixed cost using high-low point method. Definition and explanation of mixed or semi variable cost: A mixed cost is one that
Quality of Conformance Definition: The degree to which a product or service meets or exceeds its design specifications and is free of defects or other problems that mar its appearance or degrade its performance.
Quality Costs Definition: Costs that are incurred to prevent defective products from falling into the hands of customers or that are incurred as a result of defective units. There are four major types of quality cost. These are appraisal cost, prevention cost, internal failure
Quality Cost Report Definition: A report that details appraisal cost, prevention cost, internal failure cost, and external failure cost. Click here to read a detailed article about quality cost report.
Distribution of Quality Costs/Quality Cost Report: Learning objectives of this article: Prepare and interpret a quality cost report. How to Distribute Quality Costs? A company’s total quality cost is likely to be very high unless management gives this area special attention. Experts say that
Cost Classifications for Assigning Costs to Cost Objects (Direct and Indirect Cost): Learning Objective of this article: Define and explain direct and indirect cost. Give examples of direct and indirect costs. What is the difference between direct and indirect cost. Definition of Cost Object?
Cost Classification as Manufacturing and Non-manufacturing: Learning objectives of this article: Define and explain manufacturing and non-manufacturing costs. What is the difference between manufacturing and non-manufacturing costs costs? Identify and give examples of each of the three basic manufacturing cost categories. Manufacturing firms are
Cost Classification as Manufacturing and Non-manufacturing: Learning objectives of this article: Define and explain manufacturing and non-manufacturing costs. What is the difference between manufacturing and non-manufacturing costs costs? Identify and give examples of each of the three basic manufacturing cost categories. Manufacturing firms are
Avoidable Cost Definition: Any cost that can be eliminated (in whole or in part) by choosing one alternative over another in a decision-making situation. In managerial accounting, this term is synonymous with Relevant cost and differential cost.
International Aspects of Quality-ISO 9000 Quality Standards: Many of the tools used in quality management today were developed in Japan after World War II. In statistical process control, Japanese companies borrowed heavily from the work of Edwards Deming, However, Japanese companies are largely responsible