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Cost object- anything for which cost data are desired—including products, customers, jobs, and organizational subunits
Direct cost- a cost that can be easily and conveniently traced to a specified cost object
Indirect cost- a cost that cannot be easily and conveniently traced to a specific cost object
Common cost- a cost that is incurred to support a number of cost objects but cannot be traced to them individually
Raw materials- materials that go into the final product
Direct materials- materials that become an integral part of the finished product and whose cost can be conveniently traced to the finished product
Indirect materials- materials that are so insignificant it is not worth the effort to trace the cost of the materials to the end products
Direct labor (touch labor)- consists of labor costs that can be easily traced to individual units of products
Indirect labor- labor costs that cannot be physically traced to particular products, or that can be traced only at great cost and inconvenience
Manufacturing overhead- includes all manufacturing costs except direct materials and direct labor
Selling costs- include all costs that are incurred to secure customer orders and get the finished product
Administrative costs- all costs associated with the general management of an organization rather than with manufacturing or selling
Product costs (inventoriable)- include all costs involved in acquiring or making a product
Period costs- all the cost that are not product costs
Prime cost- the sum of direct materials cost and the direct labor cost
Conversion cost- the sum of direct labor cost and manufacturing overhead cost
Cost behavior- refers to how a cost reacts to changes in the level of activity
Cost structure- the relative proportion of each type of cost in an organization
Variable cost- varies, in total, in direct proportion to changes in the level

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