Chapter 2 Flashcards
What are the 3 classifications of manufacturing costs?
Direct Materials
Direct Labour
Manufacturing Overhead
Define Direct Materials and Example
Raw Materials that become an integral part of the product and that can be conveniently traced directly to it.
EX. A radio installed in an automobile
Materials that go into a final product are called _____ materials.
Raw Materials
Raw Materials may include both _____ and _____ materials.
Direct, and Indirect
Indirect materials are included as part of the _______ overhead.
manufacturing overhead
Define Direct Labourand Example
Those labour costs that can be easily traced to individual units of product.
EX. Wages paid to automobile assembly workers
Define Indirect Labour Costs
Labour costs that cannot be physically traced to the creation of products (or it would be costly to inconvenient to trace) . This cost is treated as part of manufacturing overhead.
EX. wages paid to employees who are not directly involved in production work
Define Manufacturing Overhead and Example
Manufacturing costs that cannot be easily traced directly to specific units produced.
EX. Indirect materials and Indirect labour
Which manufacturing costs are often classified as PRIME COST
Direct Material
Direct Labour
Which manufacturing costs are often classified as CONVERSION COST
Direct Labour
Manufacturing Overhead
Overtime Premiums are usually a part of what manufacturing costs?
Manufacturing Overhead
Product Specific Overtime Premiums are a part of that manufacturing costs?
Direct Labour
What are the 2 Non-Manufacturing Costs?
Selling Costs
Administrative Costs
Define Selling Costs
Costs necessary to get the order and deliver the product
Define Administrative Costs
All executive, organizational, and clerical costs
