notes - part of manufacturing overhead). Period costs:...

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Chapter 2 Manufacturing costs: Direct materials, direct labour, manufacturing overhead [indirect labour (sups/janitors), indirect materials (glue small costs to individual units), other manufacturing costs (factory rent/insurance/equipment depreciation/facilities). Non Manufacutring costs: Selling/marketing and Administrative (marketing/sales commissions/delivery/warehouse/advertising) costs (accounting/depreciation of general equipment, executive compensation). Prime cost: Direct labour and direct materials. Conversion costs: Direct labour and manufacturing overhead. Labour: Direct, indirect, idle time (part of manufacturing overhead, power failures, shortages), overtime premium (part of manufacturing overhead expect when requested), fringe benefits (insurance/retirement
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Unformatted text preview: part of manufacturing overhead). Period costs: Expensed on income statement in period incurred. Manufacturing company: selling and administrative costs. Merchandising company: All costs except products purchased. Product costs: Expensed on income statement only when sold, until then assets on balance sheet as inventory. Manufacturing company: manufacturing costs. Merchandising company: Costs of products purchased from suppliers. Manufacturing Company: Balance sheet: Raw materials, work in process, and finished goods. Income statement: Cost of goods manufactured Merchandising Company: Balance sheet: Merchandise inventory....
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