1. Basic Managerial Accounting Concepts Costs: provide future benefits Become expenses when used up Accumulating costs: linking costs to cost object Cost object: cheeseburger flying passenger to Tampa Building a Walgreens Rural King store in Paris

2. Basic Managerial Accounting Concepts Methods of assigning costs: easy versus accurate Administration costs for student in BUS 2102 Direct costs: generally easy to trace BUS 2102 class Indirect costs: more difficult to trace BUS 2102 class Variable costs: Fixed costs: Opportunity costs:

3. Basic Managerial Accounting Concepts Product costs= Direct materials+ Cheeseburger Direct labor+ Cheeseburger Manufacturing overhead: Indirect materials and indirect labor

4. Basic Managerial Accounting Concepts Period costs: not part of product costs Selling costs Cheeseburger Administration costs Cheeseburger Cost of services Direct period costs Indirect period costs

5. Basic Managerial Accounting Concepts Preparing Income Statements Manufacturing Firms Sales -COGS =Gross Profit

6. Basic Managerial Accounting Concepts Preparing Income Statements COGS Beginning Inventory +COGM =COGA -Ending Inventory =COGS

7. Basic Managerial Accounting Concepts Preparing Income Statements COGS Beginning Inventory +COGM =COGA -Ending Inventory =COGS

8. Basic Managerial Accounting Concepts Preparing Income Statements COGM Beginning WIP +Direct Materials +Direct Labor Manufacturing Overhead =Manufacturing Costs -Ending WIP =COGM