Key Terms - The costing system

A costing system collates costs and is used to help with

• managing and controlling costs
• decision making

• planning

• increasing costs

Management accounting concerns on providing information

• About historical past costs

• About possible future costs

The cost classification by elements are

• Materials

• Expenses

• Labour

• Income

Cost classification by nature is concerned with

• Indirect costs

• Direct costs

• Revenue Income

A prime cost is ..

• Total direct cost for a unit of output

• The first cost for each unit of output

• The best cost for each unit of output

The 'cost of production' is

• the total of direct and indirect production costs

• irrelevant to the price of a product or service
• not a consideration for businesses