Ch2 SLides.pdf

Ch2 SLides.pdf - 3-1Costs Terms, Concepts...

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Unformatted text preview: 3-1Costs Terms, Concepts andClassificationsChapter TwoManufacturing CostsThe ProductDirect LaborThose labor costs that can be easily traced toindividual units of Product.Learning Objective 1Direct MaterialsRaw materials that become an integral part of theproduct and that can be conveniently traceddirectly to itManufacturing OverheadManufacturing costs that cannot be traced directlyto specific units producedExamples: lndireQt labor and indirectWages paid toemployeeswho are not direcfyinvolved in productionwork,maintenancejanito:s andMaterials used to sqpportthe production process.lxempleG: lubricafltE af deleaning supplies wed in{fte eutdftohile a$$efibry-)- zNon-man ufactu ri ng CostsLearning Objective 2C lassifications of CostsManufacturing costs are oftenclassified as follows:Product Costs Versus Period CostsProduct c6ts includedirect mateilals, directPeriod costs include allselling costs andadministrative costs.BalanceSheetE]FEel"IllncomeStalementlncomeStatmentQuick Check zWhich of the following costs would be considered aperiod rather than a product cost in a manufacturingcompany?A. Manufacturing equipment depreciation.B Property taxes on corporate headquartersC Direct materials costsD, Electrical costs to light the productionfacilityE Sales commissionsQuick Check zWhich of the following costs would be considered a :period rather than a product cost in a manufacturingcompany? lA. Manufacturing equipment depreciation.@troP.n, tare-s on corporate headquarters.C. Direct materials costs.D Electncal costs to light the production^ facility.I (9s.1.. commissions.v _l-t -JBalance SheetMerchandiserCurrent assetsrlGashtReceivab[estPrepaid ExpensesaMerchandiselrwentoryManufacturerGurrent AssetsaCashoRceivablesIPrepaid Expnssa I nventories. Raw Materiali. Work in Prffess. Finished GoodsActivitiesMerchandisers . . .. Buy finished goods'. Sell finished goods.ll,lanutacturora. , .. Buy raw matedalg.. Produce and sellffrrbhed goods.Balance SheetMerchandiserCurrent assetsac6hlReceivablesPadial*y completeproducts - somem?iz{lal,labor, oroverhead tas beenadded.Learning Objective 3Basic Equation for lnventory AccountsThe lncome StatementCost of goods sold for manufacturers differs onlyslightly from cost of goods sold for merchandisersM afr uI a ctu{i11e Ccnrpe nyMrchsndisins eompanyCoC of gods eld:Beg, f,erch4ndisiDvenlory $ {4,200+ ?tr^h^q, 234.1i7GodE eveil, blerorsle $2.S0- hdihgmerchaFdi$inYenbry l12,1ml= tud of gooGsrd ll!9190cost ot goda soldi8eg linishedgoods dN+ cost of gordsGoufatluredGoodc a!6ilabbEndmgfinEhd gsads= Cosi oi qacds5 lA,ZAt234 1 5t$?48,25Cl!2.1001$236,2303-4Quick Check /lf your inventory balance at the beginning of themonth was $1,000, you bought $100 during themonth, and sold $300 during the month, what wouldbe the balance at the end of the month?...
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Ch2 SLides.pdf - 3-1Costs Terms, Concepts...

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