After completing this chapter, you should be able to: | 2-1 | Explain what is meant by the word cost. | | 2-2 | Distinguish among product costs, period costs, and expenses. | | 2-3 | Describe the role of costs in published financial statements. | | 2-4 | List and describe four types of manufacturing operations. | | 2-5 | Give examples of three types of manufacturing costs. | | 2-6 | Prepare a schedule of cost of goods manufactured, a schedule of cost of goods sold, and an income statement for a manufacturer. | | 2-7 | Understand the importance of identifying an organization’s cost drivers. | | 2-8 | Describe the behavior of variable and fixed costs, in total and on a per-unit basis. | | 2-9 | Distinguish among direct, indirect, controllable, and uncontrollable costs. | | 2-10 | Define and give examples of an opportunity cost, an out-of-pocket cost, a sunk cost, a differential cost, a marginal cost, and an average cost. |
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