Lec11 - Managerial 2071 Lecture 11: 02/14T 1. Todays plan...

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Managerial 2071 © Haijin Lin 1 Managerial 2071 Lecture 11: 02/14T 1. Today’s plan (1) Remarks (2) Actual vs. Normal (3) Full vs. Variable 2. Remarks (1) For product cost purposes: - Direct labor (DL): cost of labor inputs that can be directly identified with specific products - Direct materials (DM): cost of material inputs that can be directly identified with specific products - Overhead (OH): everything else (2) More new terms - Direct cost vs. Indirect cost - Prime cost = DM + DL, also called direct costs - Conversion cost = DL + OH 3. Illustration (1) Data (Table 6.1) Job 1 Job 2 Job 3 Total DL hours 900 1800 1300 4000 DL 12000 18000 18000 48000 DM 15000 15000 30000 60000 Prime Cost 27000 33000 48000 108000 OH category A = 96000 OH category B = 42000 Total cost = 108000 + 96000 + 42000 = 246000 - Nonfinancial data vs. financial data - Aggregation - Direct identification - Question: what is the cost of each product?
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Managerial 2071 © Haijin Lin 2 (2) Two LLAs - OH category A is assigned based on the DM$: OH
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This note was uploaded on 06/05/2011 for the course ACG 2071 taught by Professor Sumbiznatch during the Spring '06 term at University of Florida.

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Lec11 - Managerial 2071 Lecture 11: 02/14T 1. Todays plan...

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