Exam 1 Study Guide

Exam 1 Study Guide - Chapter 2 Direct Materials: materials...

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Chapter 2 Direct Materials : materials that are part of the final product and can be directly traced to the goods being produced Direct Labor : labor that can be directly traced to the goods being produced Manufacturing Overhead : factory burden or indirect manufacturing costs; costs that cannot be traced to the cost object of interest (ex . depreciation, janitorial and maintenance labor, plant supervision, materials handling, power for plant utilities, and plant property taxes) Product Cost = DM + DL + MOH Prime Cost = DM + DL Conversion Cost = DL + MOH Period Cost : all costs that are not a product cost (ex . office supplies, R&D activities, CEO’s salary, and advertising) Selling Cost : costs to market, distribute, and service a product or service; order-getting or order-filling costs (ex . salaries and commissions of sales personnel, advertising, warehousing, shipping, and customer service) Administrative Cost : all costs associated with research, development, and general administration of the organization that cannot be reasonably assigned to either selling or
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Exam 1 Study Guide - Chapter 2 Direct Materials: materials...

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