managerial accounting

A cost that does NOT change in total despite a change in volume

• Example: Rent
• The only time rent would fluctuate is if you sign a new lease

• That changes in total as volume changes
• Remains constant on a per unit basis

• Part fixed, part variable
• Example:
• Cell phone bills
• Utilities

Income forgone by NOT selecting the other alternative

• Cost that cannot be reversed
• Already been paid (incurred)
• Sunk into investment
• Can’t get it back
• An irrelevant cost and should not be considered in making additional investment decisions

An inventoriable cost

Debit expenditure to “inventory”

Assembly line personnel – people that work directly on the manufacturing of the product

All the costs of running the factory that aren’t directly related to the manufacture of a particular product

Factory utilities, depreciation, janitors, rent