Basic Cost Management Concepts
Submitted by lev_lafayette on Sun, 11/01/2009 - 14:19Multi-product firms have to account for costs that can be tied to a product, direct costs. They also have to account for indirect costs not directly measurable (e.g., electricity). A 'cost object' can be a product, service, process or any items which management requires cost information. The way that costs are assigned depends on their nature. A direct costs is easily traceable with a high degree of accuracy and indirect, or overhead, cost cannot be easily identifiable with a particular object.