LO 2-1

Understand cost classifications used for assigning costs to cost objects: direct costs and indirect costs.

LO 2-2

Identify and give examples of each of the three basic manufacturing cost categories.

LO 2-3

Understand cost classifications used to prepare financial statements: product costs and period costs.

LO 2-4

Understand cost classifications used to predict cost behavior: variable costs, fixed costs, and mixed costs.

LO 2-5

Analyze a mixed cost using a scattergraph plot and the high-low method.

LO 2-6

Prepare income statements for a merchandising company using the traditional and contribution formats.

LO 2-7

Understand cost classifications used in making decisions: differential costs, opportunity costs, and sunk costs.

LO 2-8

(Appendix 2A) Analyze a mixed cost using a scattergraph plot and the least-squares regression method.

LO 2-9

(Appendix 2B) Identify the four types of quality costs and explain how they interact.

LO 2-10

(Appendix 2B) Prepare and interpret a quality cost report.