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16 Cards in this Set
- Front
- Back
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direct materials
indirect materials |
- (raw materials) can be physically and convieiently traced to a finished product
- glue, solder, etc. (Man. Overhead) |
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direct labor
indirect labor |
- touch labor
- labor costs of janitors, supervisors, security guards, etc. |
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product costs
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- all costs involved in aquireing and making a product.
(direct materials + direct labor + manufacturing overhead) |
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period costs
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- all costs not included in product costs.
- sales commissions, office rent, advertizing, exacutive saleries... - expensed on the income statement the period they are incurred. |
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equasion for inventory accounts
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beginning balance + additions to inventory = ending balance + withdraws from inventory
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cost of goods sold for merchandising acounts
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COGS = Beg. Merchandise inv. + Purchases - Ending inventory
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COGS for manufactureing company
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COGS = Beg. Finished goods inv. + COGManufactured - Ending finished goods inventory
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variable cost
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cost that varies,in total, in direct proportion to changes in the level of activity. But cost is constant when expressed on a per unit basis.
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fixed cost
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fixed costs are not affected by changes in activity.
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sunk cost
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A cost that has already been incurred
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schedule of cost of goods manufactured part 1 (direct materials & direct labor)
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(direct material)
beg. raw materials inv. add: purchases of raw material ------------------------------ raw materials avil. for use deduct: ending raw mat. inv. ------------------------------ raw mat. used in production add: direct labor |
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schedule of cost of goods manufactured part 2 (Manufacturing overhead)
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insurence, factory
indirect labor machine rental utilities, factory supplies depreciation, factory property taxes, factory ------------------------------ Total Man. Overhead Cost |
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schedule of cost of goods manufactured part 3 (COG manufactured)
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Part 1 (dir. labor & material)
add: Part 2 (Man. OH) ------------------------------ Total Manufacturing cost add: Beg. Work in prog. inv. less: ending WOP inv. ----------------------------- Cost of Goods Manufactured |
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Differential costs
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A differece in cost between any two alternative finacial decisions when weighing costs and benifits.
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cost of goods sold
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beg. finished goods inv.
add: COG manufactured ------------------------------ goods available for sale Less: ending fin. goods inv. ------------------------------ COGS ==== |
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income statement
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sales
less: COGS ------------------------------ Gross margin less: selling expenses less: admin expenses ------------------------------ Net operating income ==================== |
