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14 Cards in this Set
- Front
- Back
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Direct materials |
Materials that become an integral part of finished product Ex: plastic in iPod |
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Direct labor |
Labor easily traced to individual units aka "Touch labor" (direct labor workers usually touch product) |
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Indirect labor |
Part of manufacturing overhead. Labor costs of those not directly working products ex: janitors, guards, supervisors |
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Manufacturing overhead |
All but DM & DL. EX: indirect materials & labor, production machine repairs, production facility: utilities, property taxes, depreciation, insurance etc |
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Selling costs |
Incurred to secure customer orders. Advertising, shipping, commissions, sales salaries, cost of finished goods warehouse |
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Administrative costs |
Costs associated with General management. Executive compensation, accounting, PR costs |
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Product costs/Inventoriable Costs |
Costs involved in acquiring or making product. Attach to goods until sold then moved to COGS |
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Period Costs |
all costs that are not product costs. All selling and administrative costs |
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Prime cost |
DM cost + DL cost |
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Conversion cost |
DL Cost + Manufacturing overhead cost |
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Variable cost |
Increases and decreases with activity level, cost per unit is constant Increases and decreases with activity level, cost per unit is constant |
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Fixed cost |
Total cost not affected by activity level, cost per unit lowers with higher output. Cost per unit higher with lower output Total cost not affected by activity level, cost per unit lowers with higher output. Cost per unit higher with lower output |
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Cost Of Goods Sold |
COGs: Beg inv + purchases -end inv |
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Contribution Margin |
Sales Rev - variable expenses |
