What is financial accounting?
Accounting where financial statements produced through financial accounting are designed to disclose the firm's business performance and financial health
What is managerial accounting?
Accounting where there is the use of information that encourages strategic planning, helps them set realistic goals, and encourages an efficient directing o
What is costing?
Costing is ascertaining the cost of a product or service and providing information to be used by management
Give one reason why it is important to know the cost of something from the perspective of a business manager
to decisions -controlling expenditure - planning and budgeting for the future
What are material costs? and give one example of such cost
Materials costs are the tangible goods used in producing the product example using plastic to make water bottles
What are labor costs? and give one example
Labor- Wages and salaries paid to employees involved in manufacturing. For example a grass cutter for a landscaping company
What are expense costs? and give one example
Expenses- regular operational expenses used for running the business and its activities ( example rent, rates and insurance)
What is a direct cost?
Direct costs are those that are directly attributable or traceable to the manufacture of a product
What is an indirect cost?
An indirect cost cannot be directly attributable or traceable to a product or service.
Which of the following is not an example of a direct cost? Metal used to produce cars, Wood used to make tables, cloth used to make sheets or paper used in the accounting department
Paper used in accounting department
Which of the following is an example of an indirect expense? Water used in making orange juice, Flour used in baking pastries, electricity used powering a blender for seasoning
electricity used powering a blender for seasoning
What is a fixed cost?
A fixed cost is a cost that does not change over the short-term, even if a business experiences changes in its sales volume or other activity levels.
What is a variable cost?
A variable cost is a corporate expense that changes in proportion to production output. Variable costs increase or decrease depending on a company's production
What is an example of a fixed cost?
Example Rent, Insurance or any flat charges that does not change with activity or production levels
What is an example of a variable cost?
materials used in production, labor wages if they are based on change in production or activity etc.
What are unit costs?
A unit cost is a total expenditure incurred by a company to produce, store, and sell one unit of a particular product or service.
