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Dear John,
Thank you so much for your lectures!
It really has been useful as I have finished watching all the lectures and the revision lectures.As I bought a ACCA approved exam kit (KAPLAN), there were some questions that I would like to ask from it.
1. Term ‘cost object’ came out. Could you please explain this term? Also I was wondering how a customer is a cost object.
2. When there is an increase in rent for a warehouse, will it change the value of inventory? Could you also explain the reason?
3. Could you please explain what ‘direct expense’ is?
4. What is distribution cost?
1. A cost object is the same as a cost unit – something for which we are measuring the cost.
2. If the warehouse is used to store finished goods then it is not a cost of production and is not included in the inventory value. If it is used to store raw materials, then because it is a fixed cost it is only relevant if we are using absorption costing and therefore any increase will only change the value of inventory if we are using absorption costing.
3. I am puzzled you are asking this because you say that you have watched the lectures. Direct expenses is the same as direct costs, which are explain on page 16 of our free lecture notes, and the lectures that go with them.
4. Distribution is another word for delivery. Distribution costs are delivery costs.
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