Chapter 13 - Cost accounting and reporting. After reading this chapter, you should be able to answer the following questions: What is the role of cost accounting as it relates to financial and managerial accounting? How does cost management play a strategic role in the organization’s value chain? What is the difference between direct and indirect costs, and how do they relate to a product or activity?. | © 2008 The McGraw-Hill Companies, Inc., All Rights Reserved. Accounting: What The Numbers Mean Tenth Edition Marshall, McManus, and Viele Chapter 13 Cost Accounting and Reporting PowerPoint Authors: Susan Coomer Galbreath, ., CPA Charles W. Caldwell, ., CMA Jon A. Booker, ., CPA, CIA Cynthia J. Rooney, ., CPA Chapter 13: Cost Accounting and Reporting Direct costs Can be easily and conveniently traced to a unit of product or other cost objective. Would not be incurred if the product or activity was discontinued. Indirect costs Cannot be easily and conveniently traced to a unit of product or other cost object. Would be incurred even if the product or activity was discontinued. LO 3 Direct Costs and Indirect Costs 13- Learning Objective 3: Contrast direct and indirect costs and illustrate how they relate to a product or activity. Direct costs can be easily and conveniently traced to a unit of product or other cost objective. Direct costs would not be incurred if the product or activity was discontinued. Indirect costs cannot be easily and conveniently traced to a unit of product or other cost object. Indirect costs would be incurred even if the product or activity was discontinued. LO 4 Costs for Cost Accounting Purposes 13- A merchandiser purchases products that are recorded on the balance sheet in inventory until sold to customers. A manufacturer purchases raw material ingredients and adds human effort and machine support. The finished products are recorded on the balance sheet until sold to customers. The Product Raw Materials Direct Labor Manufacturing Overhead LO 4 Product Costs 13- Product costs include raw materials, direct labor, and manufacturing overhead. Cost of Goods Sold Direct Labor Balance Sheet Costs Inventories Income Statement Expenses Selling and Administrative Period Costs Material Purchases Manufacturing Overhead Selling and Administrative LO 4 Product Costs and Period Costs 13- Costs included in inventory are . | © 2008 The McGraw-Hill Companies, Inc., All Rights Reserved. Accounting: What The Numbers Mean Tenth Edition Marshall, McManus, and Viele Chapter 13 Cost Accounting and Reporting PowerPoint Authors: Susan Coomer Galbreath, ., CPA Charles W. Caldwell, ., CMA Jon A. Booker, ., CPA, CIA Cynthia J. Rooney, ., CPA Chapter 13: Cost Accounting and Reporting Direct costs Can be easily and conveniently traced to a unit of product or other cost objective. Would not be incurred if the product or activity was discontinued. Indirect costs Cannot be easily and conveniently traced to a unit of product or other cost object. Would be incurred even if the product or activity was discontinued. LO 3 Direct Costs and Indirect Costs 13- Learning Objective 3: Contrast direct and indirect costs and illustrate how they relate to a product or activity. Direct costs can be easily and conveniently traced to a unit of product or other cost objective. Direct costs would not be incurred if the
