Dm, Dl, Mo - Managerial Cost Concepts

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Concepts In order for managers at companies like  Dell  or  Hewlett-Packard  to plan, direct, and control  operations effectively, they need good information. One very important type of information is related  to costs. Managers should ask questions such as the following.  1.   What costs are involved in making a product or providing a serv 2.   If we decrease production volume, will costs decrease? 3.   What impact will automation have on total costs? 4.   How can we best control costs? To answer these questions, managers need reliable and relevant cost information. We now explain and  illustrate the various cost categories that companies use. MANUFACTURING COSTS Manufacturing  consists of activities and processes that convert raw materials into finished goods.  Contrast this type of operation with merchandising, which sells merchandise in the form in which it  is purchased. Manufacturing costs are typically classified as shown in Illustration  14-3 Illustration 14-3    Classifications of manufacturing costs Direct Materials To obtain the materials that will be converted into the finished product, the manufacturer purchases  raw materials. 
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This note was uploaded on 11/08/2011 for the course ACCOUNTING ac 202 taught by Professor - during the Fall '11 term at Montgomery.

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Dm, Dl, Mo - Managerial Cost Concepts

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