Chapter 5 FINAL Flashcards
Direct Cost
Costs that can be easily and conveniently traced to a unit of product or other cost object
Examples of Direct Cost
Direct Material & Direct Labor
Indirect Costs
Costs that cannot be easily and conveniently traced to a unit of product or other cost object
Example of Indirect Costs
Manufacturing overhead
Common Costs
Indirect Costs incurred to support a large number of cost objects. These costs cannot be traced to any individual cost object
Direct Material
Raw materials that become an integral part of the product and that can be conveniently traced
Direct Labor
Labor costs that can be easily traced to individual units of product (such as wage paid to assembly line workers)`
Manufacturing Overhead
cost that cannot be easily traced to specific units
Examples of Manufacturing Overhead
Indirect materials-oils and lube used on a factory machine
indirect labor-janitors, security guards,
Selling Costs
Costs necessary to secure the order and deliver the product. Selling costs can be either direct or indirect costs
Administrative Costs
All executive, organizational, and clerical costs. Administrative costs can be either direct or indirect costs
Product Costs
include direct materials, direct labor, and manufacturing overhead
Period Costs
include all selling costs and administrative costs
Prime Costs
Direct Materials & Direct Labor
Conversion Cost
Direct Labor & Manufacturing Overhead
