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Unformatted text preview: ACCT 346 Managerial Accounting - Week 1 Threaded Discussion: Product Cost Vs. Period Cost Post #1: Comment on what makes up a product cost and what constitutes a period cost. Post #2: Use examples and explain why this distinction is necessary. Post #1 A manufacturers product costs are the direct materials, direct labor, and manufacturing overhead used in making its products. They may either consist of the purchase price if the components are bought from outside suppliers, or the combined cost of materials and manufacturing processes if the components are made in-house. Since product costs are initially assigned to inventories, they are also known as inventoriable costs. Direct materials (e.g. wood in a table) and direct or touch labor, (e.g. plant assembly line workers), can be physically and conveniently traced to a product. Manufacturing overhead consists of any costs that are not direct materials and direct labor, (e.g. indirect materials, indirect labor, factory utilities, and depreciation of factory equipment.)labor, factory utilities, and depreciation of factory equipment....
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This note was uploaded on 05/27/2011 for the course ACCOUNTING 346 taught by Professor Glenn during the Spring '11 term at DeVry NY.
- Spring '11
- Managerial Accounting