Cours 5 Flashcards
Describe the direct costs vs the indirect cost.
It shows the controllable margin in the presentation of the income statement (ex: all direct costs consumed by a cost object)
What is the cost of a cost object?
It is the total costs incurred by an entity in the process of manufacturing a good or rendering a service until the cost object is available for sale to the final user or the consumer.
What is the manufacturing cost?
It is the sum of all costs incurred to manufacture a product or a service, as opposed to selling or financing costs.
What are the types of resource costs?
- Direct materials (DM)
- Direct labor (DL)
- Manufacturing overhead (MOH)
What are direct materials costs?
They include most of the materials, parts, and components used to manufacture and assemble a product.
What are the direct labor costs?
It is the personnel directly employed in manufacturing and assembly.
What are the manufacturing overhead costs?
They include all other resources that are indirectly associated with manufacturing.
What is the direct materials inventory?
It indicates the cost of direct materials.
What is the WIP inventory?
It indicates the cost of unfinished production units.
What is the finished goods inventory?
It indicates the cost of finished products in inventory.
What is the work-in-progress inventory (beginning)?
It represents unfinished production units from the prior period that will be completed in the current period.
What is the work-in-progress inventory (ending)?
It represents the current period’s manufacturing costs that allowed for the start of units that will only be completed in the next period.
What is the direct materials inventory?
They are the direct materials used during the period.
What is the finished goods inventory?
It indicated the cost of finished products in inventory.
