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Chapter 2-Study Information

Chapter 2-Study Information - service and administrative...

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Accounting 230 Chapter 2—Study Information Horngren 13 th Ed. 1. You need to be able to define the following terms: --Cost object --Direct costs --Indirect costs --Variable costs (total and per unit) --Fixed costs (total and per unit) --Mixed costs --Cost driver --Relevant range --Inventoriable costs (Product) --Period costs --Prime costs and conversion costs 2. You need to be able to calculate fixed costs and variable costs in total and per unit. 3. You need to be able to define, discuss and give examples of the three elements of manufacturing costs: Direct materials, Direct labor and Manufacturing Overhead. 4. You need to be able to define, discuss and give examples of nonmanufacturing costs (other elements in the value chain: research & development; design; marketing; distribution; customer
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Unformatted text preview: service and administrative costs). 5. You need to be able to describe when product costs and period costs are expenses on the I/S. 6. You need to be able to list and define the three inventory accounts of a manufacturing company: Direct materials; Work in process; and Finished goods. 7. You need to be able to prepare, in good form , a Schedule of Cost of Goods Manufactured and Income Statement in good form (page 39). 8. You need to understand how the Schedule of Cost of Goods Manufactured articulates with the Cost of Goods Sold section on the Income Statement. 9. You need to be able to discuss the GAAP definition of what is “product cost” and other internal meanings of “product cost” for various management decisions....
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