The cost system
Any organization should have a cost system by which it can assign the various costs to various cost objects that is for the main reason WHICH IS pricing each provided product that is produced by the company
While doing this, the organization will face two main types of costs:
Direct cost:
Any organization should have a cost system by which it can assign the various costs to various cost objects that is for the main reason WHICH IS pricing each provided product that is produced by the company
While doing this, the organization will face two main types of costs:
Direct cost:
any cost that can be easily traced to a particular cost object
In direct cost:
In direct cost:
any cost that can't be traced to a certain product and should be allocated over the products according to an allocation base
FOR EXAMPLE
The plant administration costs can't be traced to a certain product but it played an important role in the production of each product so it couldn't be traced to a certain one, it is an in direct cost should be allocated over the overall products by using an allocation base
Hint
Cost assignment: is a general term which is used for both allocating in direct costs among the cost objects & tracing the direct cost to a cost object
FOR EXAMPLE
The plant administration costs can't be traced to a certain product but it played an important role in the production of each product so it couldn't be traced to a certain one, it is an in direct cost should be allocated over the overall products by using an allocation base
Hint
Cost assignment: is a general term which is used for both allocating in direct costs among the cost objects & tracing the direct cost to a cost object
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