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Cost or Market Whichever is Lower--Inventory Valuation: American costing tradition follows the practice of pricing year-end inventories at cost or market, whichever is lower (lower of cost or market). This…
Beginning Work in Process Inventories Average Costing Method: When beginning work in process inventory costs are merged with costs of the new period, the problem is essentially one of securing…
Beginning Work in Process Inventories First In First Out (FIFO) Costing Method: It is possible to keep beginning work in process inventory costs separate rather than average them in with…
Cost of Production Report (CPR): Definition and Explanation of Cost of Production Report (CPR): A departmental cost of production report (CPR) shows all costs chargeable to a department. It is…
Cost of Goods Sold (COGS) Definition: Cost of goods sold, COGS, or "cost of sales", includes the direct costs attributable to the production of the goods sold by a company.…
COGM Formula: COGM Formula : Prime Cost = Direct Materials Cost + Direct Labor Cost Total Factory Cost or Manufacturing Cost = Direct Materials + Direct Labor Cost +…
Cost of Goods Manufactured Definition: Cost of goods manufactured is the manufacturing costs associated with the goods that were finished during the period.
Cost of Capital Definition: The overall cost to an organization of obtaining investment funds, including the cost of both debt sources and equity sources.
Cost of Acquiring Materials | Materials Acquisition Cost: A guiding principle in accounting for the cost of materials is that all costs incurred in entering a unit of materials into…
Cost Object Definition: A cost object is anything for which cost data are desired. Examples of possible cost objects are products, product lines, customers, jobs, and organizational subunits such as…
Cost Driver Definition: Cost driver is a factor, such as machine-hours, beds occupied, computer time, or flight-hours, that causes overhead costs.
Cost Classifications on Financial Statements: Learning Objectives of this Article: Prepare a schedule of cost of goods manufactured. Prepare income statement including a schedule of cost of goods sold. Merchandising…
Cost Center Definition: A business segment whose manager has control over cost but has no control over revenue or the use of investment funds.
Cost Behavior Definition: Cost behavior is the way in which a cost reacts or responds to changes in the level of business activity.
Cost Accounting Definition: Different authorities have defined the term "cost accounting" which help in reflecting the multi-sided meaning the subject contains. The definition given by J. W. Neuner is considered…
Correcting Invoices: When the purchases order, receiving report, and invoice are compared, various adjustments may be needed as a result of the circumstances described below: Some of the materials ordered…
Conversion into Double Entry System: Learning Objectives: Define and explain conversion method. How trading and profit and loss account and balance sheet is prepared under conversion method. Conversion of books…
Conversion Cost Definition: Conversion cost is equal to direct labor cost plus manufacturing overhead cost. In equation form: Conversion Cost = Direct Labor Cost + Manufacturing Overhead Cost
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