La Consolacion College Manila

Cost Accounting
Cost Concepts and
Classifications
 MANUFACTURING COSTS
Conversion Costs

1 2 3

Direct materials Direct Factory

labor overhead

Prime Costs
as to relation to a product
NON-MANUFACTURING COSTS
General or
Marketing or
administrative
selling expense
expense

as to relation to a product
Variable Costs Fixed Costs Mixed Costs
 FIXED COST
PESO

1,500

UNITS
10 20 30
 VARIABLE COST
PESO

3,000
.
2,000
.
1,000 .
UNITS
10 20 30
METHODS OF SEPARATING
MIXED COSTS
01 02 03

SCATTER HIGH-LOW LEAST

GRAPH POINT SQUARE
 MIXED COST

PESO
SEMI-VARIABLE STEP COST
30,000
30,000
Variable
cost
20,000
20,000

Fixed
cost 10,000
10,000

10 20 30
5,000 1,000

NUMBER OF
KILOMETER
WORKERS
 as to relation to
manufacturing departments
Direct departmental charges
Indirect departmental charges

as to their nature
Common costs
Joint costs
 as to relation to an
accounting period
Capital expenditures
Revenue expenditures

Costs for planning, control and

analytical processes
Standard costs
Opportunity costs
Differental costs
Sunk costs
Relevant costs
Controllable costs
Out-of-pocket cost
 as to controllability

Controllable costs
Non-controllable costs
COST FLOW - MANUFACTURING
Cost incurrence Expense Category

Direct materials

Direct labor Work in process Finished goods Cost of goods sold

Factory overhead

Selling and administrative costs Operating expenses

COST FLOW - MERCHANDISING

Cost incurrence Expense Category

Finished goods Cost of goods sold

Selling and Administrative Operating expenses

COST FLOW - SERVICE
Cost incurrence Expense Category

Direct materials

Direct labor Cost of service

Factory overhead

Operating expenses
Selling and administrative costs
Department of Accountancy, Law and Finance

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