1) Cost accounting is that part of the accounting system that measures costs for the purposes of management decision making and financial reporting.
2) Cost accounting system typically includes two processes, cost accumulation and cost determination.
3) Direct costs can be identified specifically and exclusively with a given cost objective in an economically feasible way.
4) Indirect costs can be identified specifically with a given cost objective in an uneconomical way.
5) The three major categories of manufacturing costs are direct materials, direct labour and factory overhead.
6) Prime costs include direct labour and factory overhead.
7) Product costs are identified with goods produced or purchased for resale.
8) Period costs are inventoriable and are expensed when the inventory is sold.
9) A manufacturer has three inventories as compared to a merchandiser, which has only one.
10) The term expense is used to describe both an inventory expenditure and a cost.