1. Cost Foundations
Cost objects, behaviour, assignment and inventory effects
1. Cost Foundations
Cost is not meaningful until you name the object, purpose and horizon.
| Chapter | Northstar question | Output |
|---|---|---|
| Cost Concepts | Which costs change with volume or alternatives? | Cost classification and mixed-cost model |
| Costing Systems | Which model explains support-resource consumption? | Traditional versus ABC comparison |
| Variable and Absorption Costing | Why does inventory movement change reported profit? | Profit reconciliation |
Preparation
Be able to distinguish:
- traceability from behaviour;
- product cost from decision relevance;
- spending from resource consumption;
- total fixed cost from fixed cost per unit.