文档介绍：Managerial Accounting(Ninth Edition)Chapter 2 Cost Terms, Concepts, and Classifications
Cost Terms, Concepts, and Classifications
Chapter2
Comparing Merchandising and Manufacturing Activities
Merchandisers 3>. . .
Buy finished goods.
Sell finished goods.
Manufacturers . . .
Buy raw materials.
Produce and sell finished goods.
MegaLoMart
Manufacturing Cost Concepts
Financial Accounting
Cost is a measure of resources used or given up to achieve a stated purpose.
Managerial Accounting
Product costs are the costs pany assigns to units produced.
Manufacturing Costs
The Product
Direct Materials
Direct Labor
Manufacturing Overhead
Direct Materials
Those materials that e an integral part of the product and that can be conveniently traced directly to it.
Example: A radio installed in an automobile
Direct Labor
Those labor costs that can be easily traced to individual units of product.
Example: Wages paid to automobile assembly workers
Manufacturing Overhead
Manufacturing costs that cannot be traced directly to specific units produced.
Examples: Indirect labor and indirect materials
Wages paid to employees who are not directly involved in production work. Examples: maintenance workers, janitors and security guards.
Materials used to support the production process. Examples: lubricants and cleaning supplies used in the automobile assembly plant.
Classifications of Costs
Manufacturing costs are bined as follows:
Direct Materials
Direct Labor
Manufacturing Overhead
Prime Cost
Conversion Cost
Nonmanufacturing Costs
Marketing and selling costs . . .
Costs necessary to get the order and deliver the product.
Administrative costs . . .
All executive, organizational, and clerical costs.
Product Costs Versus Period Costs
Product costs include direct materials, direct labor, and manufacturing overhead.
Period costs are not included in product costs. They are expensed on the e statement.
Inventory
Cost of Good Sold
Balance Sheet
e Sta