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Five pounds of material and one hour of labor cannot be added together to produce a meaningful total; but if the amounts are converted to money at, say $2 per pound for material and $17 per hour for labor, they can be added to produce a total cost of $27.
3.Cost measurement always relates to a purpose.
Ex. products, departments, projects, or any other thing or activity for which a monetary measurement of resources used is desired.
Cost object/ive
-is the technical name for the product, project, organizational unit or other activity or purpose for which costs are measured.
Cost Accounting System
-routinely collects costs and assigns them to cost objects...
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