Chapter 11 Flashcards
3 functions of management
Planning, directing and controlling
Manufacturing costs
Activities and processes that convert raw materials into finished goods
2 characteristics of indirect materials
- not physically part of the finished product
- are impractical to trace to finished product because their association with finished product is too small in terms of cost
Components of product costs
Direct materials, direct labor, manufacturing overhead
Where are product costs recorded
In inventory
Where are period costs recorded
Expenses (as they occur)
Period costs include…
Selling and administrative expenses
Total manufacturing costs
Sum of direct material costs, direct labor costs, and manufacturing overhead in the current year
Total work in progress
Cost of beginning work in process and total manufacturing costs for the current period
Activity based costing
Allocated overhead based on use of activities
Results in more accurate product costing and scrutiny of all activities in a value chain
Balance scorecard
Evaluates operations in an integrated fashion, uses both financial and non-financial measures, links performance to overall objectives
