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COST TERMINOLOGY - Coggle Diagram

- - - - CHANGE as a RESULT of a DECISION
        
        SUNK
        
        Incurred in the PAST
    - - CONVERT RAW MATERIALS into finished products
    - - free CAPACITY
      - IDLE capacity
      - Supplier reliability
      - REDUNDANCIES
    - - Cost INCREASES & DECREASES between the ALTERNATIVES that are under REVIEW
  - - - COST
        
        Cost Only
      - PROFIT
        
        Costs + Revenues
      - INVESTMENT
        
        Costs + Revenues + Investments
  - - - Products, services, depts or responsibility centres
    - - CATEGORIES OF EXPENSES
        
        DM, DL & OH
      - COST BEHAVIOUR
        
        FIXED, SEMI VARIABLE etc..
    - - 1 NATURE
        
        Engaged in BUSINESS, consuming resources
      - 2 BEHAVIOUR
        
        Costs CHANGE due to VOLUME
        
        Fixed/Variable
        
        CVP Analysis
      - 3 TRACEABILITY
        
        RELATIVE to cost OBJECT
        
        DIRECT/INDIRECT
        
        Job Costing
      - 4 BUSINESS FUNCTION
        
        Man V Non-Man
        
        Product / Period
  - - - PAST/ HISTORICAL
        
        Sunk
      - CURRENT
        
        Replacement, Buying in
      - FUTURE
        
        Budgeted
    - - VARIABLE
        
        Fluctuates
      - FIXED
        
        Remains constant
      - MIXED
        
        Part fixed, Part variable
      - STEP
        
        Increases in steps
    - - PRODUCT
        
        Inventoriable
      - PERIOD
        
        Expensed
      - UNEXPIRED
        
        B/S
      - EXPIRED
        
        P&L
    - - RELEVANT
        
        Important
      - OUT OF POCKET
        
        Cash
      - SUNK
        
        Historical
      - DIRECT
        
        Traceable
      - INDIRECT
        
        Traceable
- - - - CHANGES INVERSELY with OUTPUT
  - - - unit cost UNCHANGED in relation to output
- - - - INCURRED, historic or past
    - - Predicted, forecasted (future)
  - - - ANY ACTIVITY for which a SEPARATE MEASURE of COST is desired
      - Product, service, project, dept, activity
      - Anything for which a MEASURE OF CONSUMPTION of RESOURCES is USED
- - - - Op Inventory + PURCHASE OF INVENTORY during period - CLOSING INVENTORY (valued at purchase cost)
    - - ALL OTHER costs
  - - - ALL OTHER costs
    - - Beg Inventory of WIP + Costs assigned - Closing WIP
- - - - COLLECTION OF COST DATA
      - Cost ASSIGNMENT
        
        TRACING DIRECT COSTS
        
        RELATE to a particular cost object & CAN BE TRACED in an ECONOMICALLY FEASIBLE MANNER
        
        DIRECT LABOUR
        
        DIRECT MATERIALS
        
        SOURCE DOCUMENT
        
        Materials Requisition Form
        
        Labour Time Sheets
        
        ALLOCATING INDIRECT COSTS
        
        RELATE to the Cost Object but CANNOT BE TRACED IN A COST EFFECTIVE MANNER
        
        Plant electricity, rent of plant, salary of production supervisor
        
        FACTORS AFFECTING
        
        MATERIALITY
        
        smaller not economically feasible
        
        thread, glue
        
        IMPROVEMENTS IN IT
        
        Barcoding an aid
        
        DESIGN/LAYOUT OF OPERATIONS
        
        EXCLUSIVE use
        
        Cellular layout
        
        BOTH DIRECT & INDIRECT depending on choice of cost object