Exhibits have been changed so students can more easily follow the concepts. This chapter continues building on the framework begun in Chapter 1, emphasizing 1 calculating the cost of products or other cost objects, 2 obtaining information for planning and control as well as performance evaluation, and 3 identifying relevant information for decision making. It introduces concepts essential to topics covered in later chapters. Understanding the concepts and terms discussed in this chapter is a prerequisite to successfully completing the remaining chapters of the text. One guiding principle is that the term cost is a relative term, dependent both on the cost object chosen and the purpose for which cost is being calculated and reported.
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