Those factory labor costs that can be physically traced to the production of

Those factory labor costs that can be physically

This preview shows page 16 - 28 out of 92 pages.

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 Materials Direct Labor Direct Labor Mfg. Overhead Mfg. Overhead Work-in- Process Work-in- Process Finished Goods Finished Goods Cost-of Goods Sold Cost-of Goods Sold Cost of Goods Sold Cost of Goods Sold Nonmanufacturing Expenses Nonmanufacturing Expenses Sales - = Gross Margin - Net Income = Income Statement Sold Known as Period costs. They are expensed in the period in which they are incurred. Nonmanufacturing Costs Costs incurred for other than production activities.
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Direct Materials Direct Materials Direct Labor Direct Labor Mfg. Overhead Mfg. Overhead Work-in- Process Work-in- Process Finished Goods Finished Goods Cost-of Goods Sold Cost-of Goods Sold Cost of Goods Sold Cost of Goods Sold Nonmanufacturing Expenses Nonmanufacturing Expenses Sales - = Gross Margin - Net Income = Income Statement Sold General & Administrative Expenses All executive, organizational, and clerical costs associated with the general management of the firm. Selling & Distribution Expenses All costs necessary to secure customer orders and get the products/services to the customer.
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Direct Materials Direct Materials Direct Labor Direct Labor Mfg. Overhead Mfg. Overhead Work-in- Process Work-in- Process Finished Goods Finished Goods Cost-of Goods Sold Cost-of Goods Sold Cost of Goods Sold Cost of Goods Sold Nonmanufacturing Expenses Nonmanufacturing Expenses Sales - = Gross Margin - Net Income = Income Statement Sold P r o d u c t C o s t s Period Costs
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Some Other Definitions Mgmt. Acct. Definitions! Oh good! I love definitions!
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Direct Costs Indirect Costs Cost Object Anything for which a separate measurement of costs is desired (products , customers, departments, etc.)
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Direct Costs Indirect Costs Cost Object Costs that are related to and directly traceable to the identified cost objective. (Direct Material, Direct Labor) Costs that are related to, but not traceable to, the identified cost objective. (Manufacturing overhead)
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. . . the value of assets given up, or to be given up, to acquire other assets. Cost is defined as . . .
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. . . the cash or cash equivalent value sacrificed for goods and services that are expected to bring a current or future benefit to the organization . Cost is defined as . . .
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. . . the cash or cash equivalent value sacrificed for goods and services that are expected to bring a current or future benefit to the organization . Cost is defined as . . .
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The value of assets given up to generate revenue. An expired cost. Expense . . .
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Cost Vs. Expense Cost Vs. Expense Benefits Current Period Only Benefits Current Period Only Unused Portion Unused Portion Used Portion Used Portion Benefits Multiple Periods Benefits Multiple Periods Theoretically, all costs become assets.
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