Cost Concepts and Classification

What the page covers

The core of this page is the language of cost. The mind map Cost/Managerial Accounting sets out cost classifications, direct and indirect costs, and manufacturing cost categories such as direct materials and direct labour. Other maps, such as The different types of costs and Fundamental Cost Concepts, approach the same ideas in their own way.

From there the resources move into how costs are assigned. Basic Cost Accumulation and Assignment covers cost pools and cost allocation bases. Overhead explains costs that cannot be traced directly to a product, department or service. Process costing, job costing, variable and absorption costing, standard costs and activity-based costing all appear too.

Where to start

Begin with vocabulary. The flashcard deck Chapter 1 Vocab Words Cost/Managerial Accounting runs through terms such as cost object, cost behaviour, conversion cost and differential cost. Read the first mind map alongside it, so each term sits in a structure.

1. Learn the terms and classifications.
2. Move to Costing Methods for job and process costing.
3. Look at Overhead and VARIABLE AND ABSORPTION COSTING.
4. Finish with activity-based costing and variances.

Using quizzes and maps together

Use a map to see how a topic hangs together, then test yourself. The quiz Adv Managerial Acct - Process Costing gives a weighted-average problem for a processing department, which pairs well with the Process costing map on normal and abnormal losses and equivalent units. If a question goes wrong, return to the map branch and then to the matching flashcards, such as Variance Formulas.

Exam-minded material

Some resources mention AAT, CMA, ICAEW and CIMA P2. The P 2 Study Notes - Area A notes cover cost analysis, TQM, learning curves and activity-based management. Check them against your own syllabus.

Where it fits

This unit sits within the Cost and Management Accounting strand of Accounting and auditing. Open a resource that matches your gap today, and add your own map or deck when you spot something missing.