MAC3701 2021 Study guides, Class notes & Summaries

A cost object is any activity for which a separate measurement of costs is desired. In other words, if the users of accounting information want to know the cost of something, this something is called a cost object. Examples of cost objects include the cost of a product, the cost of rendering a service to a bank customer or hospital patient, the cost of operating a particular department or sales territory or indeed anything for which one wants to measure the cost of resources used. We shall see ...

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1. A common business decision is the make/buy decision where a manager must choose between buying an item or manufacturing it. The company must evaluate both the qualitative matters, as well as the quantitative matters that deal with costs. The following statements were made by a manager regarding qualitative matters which will influence his decision: 1. The risk of destroying long-run relationships with suppliers, which may prove to be harmful and disruptive. 2. The reduction in dependence o...

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