Chapter 2A

Chapter 2A - Chapter 2A- Cost Terms, Concepts and...

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Chapter 2A- Cost Terms, Concepts and Classifications I. Further Classification of Labor Costs a. Idle time i. Machine breakdowns, materials shortages, power failures and the like result in idle time ii. Labor costs incurred during idle time may be treated as a manufacturing overhead cost rather than as a direct labor cost b. Overtime Premium i. Overtime Premium paid to all factory workers is considered to be part of manufacturing overhead c. Labor Fringe Benefits i. Made up of employment-related costs paid by the employer and include the costs of insurance programs, retirement plans, various supplemental unemployment benefits, and hospitalization plans ii. Indirect labor by adding them to manufacturing overhead II. Cost of Quality a. Quality of Conformance i. High Quality- a product that meets or exceeds its design specifications and is free of defects that mar its appearance or degrade its performance ii. Quality Cost- refers to all of the costs that are incurred to prevent defects or that result from defects in products
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Chapter 2A - Chapter 2A- Cost Terms, Concepts and...

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