Supply Chain Glossary - D

direct costing also variable costing

Syn: variable costing.

1) In traditional cost accounting, variable costs that can be directly attributed to a particular job or operation. Direct material and direct labor are traditionally considered direct costs. 2) In activity-based cost accounting, a cost that can specifically be traced and is economically feasible to track to a particular cost object, e.g., units produced, a production line, a department, or a manufacturing plant. In contrast, if the cost must be allocated across various cost objects, it is an indirect cost. Based on the cost object under consideration, the classification of direct and indirect can change. Activity-based cost accounting assumes that more costs traditionally viewed as fixed costs are variable and can be traced to cost objects.

A method of inventory bookkeeping that decreases the book (computer) inventory of an item as material is issued from stock, and increases the book inventory as material is received into stock by means of individual transactions processed for each item. The key concept here is that the book record is updated coincidentally with the movement of material out of or into stock. As a result, the book record is a representation of what is physically in stock. Syn: discrete issue.


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