Cost objects are items for which management wants to track costs, direct costs are costs that can be traced to specific cost objects, and indirect costs are costs that cannot be directly traced to cost objects. Fixed costs remain the same regardless of activity levels while variable costs change in relation to changes in activity. Direct materials, direct labor, and manufacturing overhead are costs of production that are included in inventory and eventually become part of the cost of goods sold, while period, selling, and administrative costs are operating expenses.
Cost Objects, Direct vs Indirect Costs, and Fixed vs Variable Costs Explained
1. Explain the meaning of cost objects, direct cOsts, and indirect
Week 2 AssignmentRead the Chapter 2 of your Cornerstones of managerial Accounting 6th
ed. and write a 700 word essay that covers the following:Explain the meaning of cost
objects, direct cOsts, and indirect costs (provide example).Describe the difference between
a fixed cost and variable costs (provide example).Explain the role of direct materials, direct
labor, and manufacturing overhead in a company.Describe the role of period, selling, and
administrative costs.
