Basic Managerial Accounting Concepts Costs: provide future benefits Become expenses when used up Accumulating costs: linking costs to cost object Cost object: cheeseburger flying passenger to Tampa Building a Walgreens Rural King store in Paris

Basic Managerial Accounting Concepts Methods of assigning costs: easy versus accurate Administration costs for student in BUS 2102 Direct costs: generally easy to trace BUS 2102 class Indirect costs: more difficult to trace BUS 2102 class Variable costs: Fixed costs: Opportunity costs:

Basic Managerial Accounting Concepts Product costs= Direct materials+ Cheeseburger Direct labor+ Cheeseburger Manufacturing overhead: Indirect materials and indirect labor

Basic Managerial Accounting Concepts Period costs: not part of product costs Selling costs Cheeseburger Administration costs Cheeseburger Cost of services Direct period costs Indirect period costs

Basic Managerial Accounting Concepts Preparing Income Statements Manufacturing Firms Sales -COGS =Gross Profit

Basic Managerial Accounting Concepts Preparing Income Statements COGS Beginning Inventory +COGM =COGA -Ending Inventory =COGS

Basic Managerial Accounting Concepts Preparing Income Statements COGS Beginning Inventory +COGM =COGA -Ending Inventory =COGS

Basic Managerial Accounting Concepts Preparing Income Statements COGM Beginning WIP +Direct Materials +Direct Labor Manufacturing Overhead =Manufacturing Costs -Ending WIP =COGM