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CHAPTER 2 Cost Concepts and the Cost Accounting Information Systems.

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Presentation on theme: "CHAPTER 2 Cost Concepts and the Cost Accounting Information Systems."— Presentation transcript:

1 CHAPTER 2 Cost Concepts and the Cost Accounting Information Systems

2 Learning Objectives Mampu mendefinisikan pengertian cost object Mampu menjelaskan term direct cost and indirect cost Considerate for creating a cost accounting information system Explain about cost classification

3 COST CONCEPTS Cost versus Expense Cost object is defined as any item or activity for which costs are accumulated and measured Traceability of Costs to Cost Object Cost traceability in Service Industries

4 The Cost Information System An integrated and coordinated information system provide information needed by managers Designing a cost accounting information system requires an understanding of both the organizational structure and the type of information required. Chart of Accounts Electronic Data Processing (EDP)

5 Classifications of Costs PRODUCT, as follow : Manufacturing Costs : Direct Materials, Direct Labor and Factory Overhead ( indirect material, indirect labor and other factory costs ) Commercial Expenses : Marketing Expenses and Administrative Expenses Explain from figure 2-1 page 2-11

6 Classifications of Costs VOLUME OF PRODUCTION, as follow: Variable Cost change in proportion to changes in activity within a relevant range. Fixed cost are constant in total amount within a relevant range of activity Semi Variable cost contain both fixed and variable elements

7 Classifications of Costs MANUFACTURING DEPARTMENTS, as follow : Producing Departments and Service Department Direct Departmental Cost and Indirect Departmental Cost Common Costs and Joint Cost

8 Classifications of Costs ACCOUNTING PERIOD, as follow : Capital Expenditure Revenue Expenditure DECISION, ACTION OR EVALUATION Differential Cost Sunk Cost


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