Chapter 2

Chapter 2 - Costs Terms, Concepts, and Classifications...

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Accounting 2102 Costs Terms, Concepts, and Classifications Chapter Two
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2 Accounting 2102 Assigning Manufacturing Costs to Cost Objects direct costs can be traced to a cost object examples: direct material and direct labor indirect costs cannot be traced to a cost object example: manufacturing overhead what is a cost object?
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3 Accounting 2102 Direct Materials Direct Labor Manufacturing Overhead Manufacturing Costs . . . Quench Your Thirst, LLC what’s the cost object . . .  Serving of lemonade
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4 Accounting 2102 Direct Materials Raw materials that become an integral part of the product and that can be conveniently traced directly to it. example:  lemons for the lemonade
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5 Accounting 2102 Direct Labor Those labor costs that can be easily traced to individual units of product. example: wages paid to “lemon squeezer”
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6 Accounting 2102 Manufacturing costs that cannot (or should not) be traced directly to specific units produced. Manufacturing Overhead
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Chapter 2 - Costs Terms, Concepts, and Classifications...

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