ch 2
Manufacturing cost has three categories:
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Direct Materials, -
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Direct Labor,-
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Direct labor also called touch labor
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Manufacturing overhead
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Manufacturing overheading includes indire mater/ indirect labor maintenance/repairs
Indirect labo
r -labor cost is manufacturing overhead
Non Manufacturing cost
- selling cost and administrative cost
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selling cost: all cost to get customers money
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marketing,shipping,sales salaries
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administrative cost: the general management
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general acct. executive compensation
Raw materials
any materials that go into the final product;
raw materials can include direct or indirect materials:
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direct materials
ex. tires
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indirect materials
ex. glue i.e. manufacturing overhead
Product cost
- manufacturing and non manufacturing cost
direct materials/ direct labor/ manufacturing overhead
usually in the inventory section of the balance sheet
Period cost-
selling and administrative cost
ex. rental cost,advertising/ etc.
variable cost-
fixed cost-
remains constant, in total, regardless of changes in the levels of activity
Examples include straight-line depreciation, insurance, rent, and administrative salaries
x= the number of activitiesin a small manufacturing facility, one welder is needed for every 200 hours of machine-hours or fewer in a month. The welder is paid a monthly salary of $2,500. If the total monthly requirement is 1,300 machine-hours, what would be the total salaried employee expense?
