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Cost terms and concepts Chapters 2&3

Cost terms and concepts Chapters 2&3. ME 2027 Performance and Cost Analysis ME 2605 Cost Management and Control (for IMIM) Håkan Kullvén, KTH, 2007 Hakan.kullven@indek.kth.se. Figure 2.1 page 34. Period and Product. Sold. Direct Materials Direct Labour Manufacturing overhead

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Cost terms and concepts Chapters 2&3

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  1. Cost terms and conceptsChapters 2&3 ME 2027 Performance and Cost Analysis ME 2605 Cost Management and Control (for IMIM) Håkan Kullvén, KTH, 2007 Hakan.kullven@indek.kth.se

  2. Figure 2.1 page 34 Period and Product Sold

  3. Direct Materials Direct Labour Manufacturing overhead Indirect material Indirect labour Prime costs = direct costs Conversion cost Product cost and period cost Non-manufacturing costs Selling Administrative Cost objects costs Sums up to all costs

  4. Figures 2.2, 2.3, 2.4 pages 35-36 Cost behaviour

  5. Other cost terms • Relevant and irrelevant costs and revenues • Avoidable and unavoidable costs • Sunk costs • Opportunity costs • Incremental (differential, or marginal) costs and revenues

  6. Figure 3.1, page 59 Cost Assignment

  7. Exhibit 3.2 on page 69 Page 71 Figure 3.3, page 65 Two-stage process

  8. Exhibit 3.3 on page 73 Figure 3.3, page 65 … and with ABC

  9. Next, we… discuss how a costing system can be designed for products, jobs or services that are unique: job costing systems. This is in contrast to process costing, a later topic. Chapter 4

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