to Cost Accounting
Based Costing (ABC)
very important to distinguish between what is a cost and what is an
expense. A cost
is a sacrifice of resources.
Every day we buy many different things like clothes, food, books,
music, or even a car, and so on. So
when we buy something, we cease to have the ability to use these
resources (typically cash or credit line) to buy something else.
price of each item measures the sacrifice we must do to acquire it.
you pay cash or use any other asset, and to pay now or later (if we use
a credit card), the cost of an item purchased is represented by what we
give up as a result.
an expense is a cost charged against income in an
period, then the costs are deducted from income in that accounting
incur a cost when desist (sacrifice) of resources, whether it is
counted as an asset or an expense.
cost accounting focuses on the costs, not expenditures. The
two broader categories in costs are the disbursement costs and
opportunity costs. A disbursement
cost is a past, present or future cash flow. Consider
the cost of a college education. Clearly
the cash flows that are tuition, books, and fees are disbursement costs.
is not all that students sacrifice, they also sacrifice the time to
take a college education. This
is an opportunity cost. The opportunity
cost is the loss of a benefit that could have been realized,
which has been renounced by the best alternative use of a resource.
example, many students left their jobs to take time to get a career.
ingreso al cual se ha renunciado es parte del costo de obtener una
carrera profesional y es el beneficio al cual se ha renunciado que
podria haberse realizado por el uso alternativo de un recurso limitado:
tiempo. The earning which has been renounced is part of
of obtaining a career and is the benefit to which they have give up
that could have been realized by the alternative use of a limited