Accounting 505 term project - Accounting 505 term project...

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Accounting 505 term project Lynda AC505/Term Project Direct material cost is known as any material cost that can be identified specifically with a final cost objective. Material costs must not be charged to a contract as a direct cost if other material costs incurred for the same purpose in like circumstances have been charged as an indirect cost to that contract or any other contract. All material costs specifically identified with other contracts are direct costs for those contracts and must not be charged to another contract directly or indirectly. Example of a direct material cost is a radio installed in an automobile. A direct labor cost is any labor cost that can be identified specifically with a final cost objective (e.g., a particular contract). Labor costs identified specifically with a particular contract are direct costs of the contract and must be charged to that contract. Labor costs must not be charged to a contract as a direct cost if other labor costs incurred for the same purpose in like circumstances have been charged as an indirect cost to that contract or any other contract. All labor costs specifically identified with other contracts are direct costs for those contracts and must not be charged to another contract directly or indirectly. Manufacturing overhead, the third element of manufacturing cost, includes all costs of manufacturing except direct material and direct labor. Examples of manufacturing overhead include items such as indirect material, indirect labor, maintenance and repairs on production equipment and heat and light, property taxes, depreciation, and insurance on manufacturing facilities. Indirect materials are minor items such as solder and glue in manufacturing industries.
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This note was uploaded on 03/26/2012 for the course AC505 AC505 taught by Professor Dillan during the Spring '10 term at Keller Graduate School of Management.

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Accounting 505 term project - Accounting 505 term project...

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