Ch 10 - LEARNING OBJECTIVE Distinguish activities of...

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1 LEARNING OBJECTIVE 1 Distinguish activities of manufacturer from merchandising or service firm .
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2 MANUFACTURING FIRM DIFFERENCES Service firms earn revenue from providing services Merchandising firms earn revenue from selling merchandise inventory Manufacturing firms Earn revenue from manufacturing and selling finished goods Have 3 inventories: materials, work-in-process, finished goods LO 1
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3 LEARNING OBJECTIVE 2 Define, illustrate materials, labor, factory overhead costs .
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4 LO 2 EXHIBIT EXHIBIT 1 1 Goodwell Printing Co. has 2 departments
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5 GOODWELL PRESS Costs Cost is payment or commitment to pay cash for future revenues Manufacturing costs Direct materials Direct labor Manufacturing overhead Conversion costs are the costs of direct labor and manufacturing overhead necessary to convert raw materials into finished goods LO 2
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6 DIRECT MATERIALS COSTS LO 2 Cost of direct materials is cost of raw materials used in the manufacture of a product Goodwell Printing Paper Book covers
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7 DIRECT LABOR COSTS Direct labor is Labor used to convert materials into product Goodwell Printing Wages of employees who operate printing presses LO 2
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8 FACTORY OVERHEAD COSTS Factory overhead is costs other than materials, labor incurred in manufacturing process Machine depreciation Factory insurance Electricity Machine maintenance LO 2
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9 LEARNING OBJECTIVE 3 Describe accounting systems used by manufacturing businesses .
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This note was uploaded on 05/01/2008 for the course ACC 2301 taught by Professor Staff during the Spring '08 term at Texas State.

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Ch 10 - LEARNING OBJECTIVE Distinguish activities of...

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