CHAPTER 2B - Cost Terms, Concepts, and Classifications UAA...

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Cost Terms, Concepts, and Classifications UAA – ACCT 202 Principles of Managerial Accounting Dr. Fred Barbee Chapter
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Specify “Tag” the Cost We need to place an adjective (tag) on the cost to identify what it is. Direct Cost
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Cost Flows in a Manufacturing Firm Direct Materials Direct Labor Mfg. Overhead Work-in- Process Finished Goods Cost-of Goods Sold
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Cost Flows in a Manufacturing Firm Direct Materials Direct Labor Mfg. Overhead Work-in- Process Finished Goods Cost-of Goods Sold Manufacturing Costs Costs incurred in the manufacture of goods being produced. Known as product (inventoriable) costs. They are expensed when the product is sold.
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Cost Flows in a Manufacturing Firm Direct Materials Direct Labor Mfg. Overhead Work-in- Process Finished Goods Cost-of Goods Sold Those materials that become an integral part of the finished product and can be physically traced to the product. Those factory labor costs that can be physically traced to the production of the finished product. All costs associated with the manufacture of a product except direct materials and direct labor.
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Direct Materials Direct Labor Mfg. Overhead Work-in- Process Finished Goods Cost-of Goods Sold Cost of Goods Sold Nonmanufacturing Expenses Sales - = Gross Margin - Net Income = Income Statement Sold Known as Period costs. They are expensedin the period in which they are incurred. Nonmanufacturing Costs Costs incurred for other than production activities.
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Direct Materials Direct Labor Mfg. Overhead Work-in- Process Finished Goods Cost-of Goods Sold Cost of Goods Sold Nonmanufacturing Expenses Sales - = Gross Margin - Net Income = Income Statement Sold General & Administrative Expenses
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This note was uploaded on 08/10/2011 for the course ECON 123 taught by Professor Other during the Spring '11 term at Pontificia Universidad Catolica Madre y Maestra.

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CHAPTER 2B - Cost Terms, Concepts, and Classifications UAA...

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