Week 2(1): The 10 questions for the textbook I used.

I got a book named principles of management accounting. By reading this book, I have 10 questions here about the book. This book is the text book of acc202 at Michigan State University.

1. what is opportunity cost?
Opportunity cost is the potential benefit  that is given up when one alternative is selected over another. To illustrate this important concept, we need a lot of practice.

2. what is differential cost?
Differential cost is also known as incremental cost. A cost between any two alternatives is known as a differential cost.

3. what is Direct cost?
A direct cost is a cost that can be easily and conveniently traced to a specified cost object.the concept of direct cost extends beyond just direct materials.

4. what is fixed cost?
A fixed cost is a cost that remains constant, in total, regardless of changes in the level of activity. Unlike variable cost, fixed costs are not affected by changes in activity.

5.what is Managerial accounting?
Managerial accounting is concerned with providing information to managers. people inside an organization who direct and control its operations.

6.What is Direct labor?
Direct labor consists of labor costs that can be easily. Direct labor is sometimes called touch labor.

7.What is Manufacturing overhead?
Manufacturing overhead , the third element of manufacturing cost, includes all manufacturing costs except direct materials and direct labor.

8.What is product costs?
Product cost include all costs involved inacquinring or making a product. In case of manufactured goods.these cost consist of direct manufacturing.

9.What is period costs?
Period costs are all cost that are not product costs. For example, sales commissions and the rental cots of administrative offices are period costs. period costs are not included as part of the cost cost of either purchased.

10.What is prime cost?
prime cost is the sum of direct materials cost and direct labor cost.

The course Accounting 202 is a core course in business Eli broad college, so the text book is really important for the business major students to read. Many basic knowledge and concept must be remembered in our mind.

Citation: Principles of management accounting. Eric W.Noreen, Peter C.Brewer, Ray H,Garrison. The eli broad college of business Michigan State University.