ACC221ch02sp08

ACC221ch02sp08 - ACC221 Chapter 2 Cost Terms, Concepts and...

Info iconThis preview shows pages 1–6. Sign up to view the full content.

View Full Document Right Arrow Icon
1 ACC221 Chapter 2 Cost Terms, Concepts and Classifications 2 Objectives 1. Define manufacturing and merchandising. 2. Identify each of the three basic manufacturing cost categories. 3. Distinguish between product costs and period costs. 4. Review the difference between the financial statements of a manufacturing company and a merchandising company.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
3 Objectives 5. Prepare a schedule of cost of goods manufactured. 6. Understand the differences between variable costs and fixed costs. 7. Understand the differences between direct and indirect costs. 8. Define cost classifications used in making decisions: differential costs, opportunity costs, and sunk costs. 4 Objective 1 Define manufacturing and merchandising.
Background image of page 2
5 Definitions Manufacturing – the transforming of an input such as raw materials into a form that has greater value to customers. Merchandising – the selling of finished goods acquired from a manufacturer or other source. 6 Objective 2 Identify each of the three basic manufacturing cost categories.
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
7 Three Manufacturing Cost Elements 1. Direct Materials 2. Direct Labor 3. Manufacturing Overhead 8 Direct Materials Sometimes called raw materials. Materials that are an integral part of the finished product . Materials that can be physically and conveniently traced into it.
Background image of page 4
9 Direct Labor Sometimes called touch labor. Those labor costs that can be easily traced to products. 10 Manufacturing Overhead Sometimes called indirect manufacturing cost, factory overhead or factory burden . Includes all costs of manufacturing except
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 6
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 06/09/2008 for the course ACC 221 taught by Professor Tribunella during the Spring '08 term at Rochester.

Page1 / 18

ACC221ch02sp08 - ACC221 Chapter 2 Cost Terms, Concepts and...

This preview shows document pages 1 - 6. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online