Terms to know for this class Flashcards
Direct Costs
Costs that can be traced to a object in a cost effective way
Direct Materials
Direct Labour
DM
Direct Materials
DL
Direct Labour
Indirect Costs
Costs that cannot be traced to a cost object in a cost effective way because the benefits from the use of the resources are shared
MOH Costs
MOH
Manufacturing Overhead Costs
Examples of MOH
Utilities
Rent
Insurance
Depreciation
Maintenance supplies
Supervisor Salaries
Other Indirect Costs
Not MOH
Accounting
Administration
Advertising and
Sales
Variable Costs
Per unit- stays the ssame
More output=More cost
Lower output= Low cost
Ex. Direct Materials
Fixed Costs
Per unit- Changes per unit inversely
Stays the same in total
Ex. Rent
Period Costs
Costs that have noting to do with producing the goods. Go to IS immediately
Ex. Accounting, administration, advertising, selling, distribution
Inventoriable (Product Costs)
Costs relating to manufacturing the products of purchasing the products that are resold
These costs are first recorded on the statemnt of FP as a CA (inventory)
Not expensed as COGS on the IS until they are sold.
Ex. DM, DL, Manufacturing or factory overhead
Materials Inventory
Materials purchased can be DM or indirect materials depending on whether they are easily traced to a product or not
WIP
Work in process Inventory
WIP
Units of products NOT completed. There are at some level of completion but not 100%. they are still being assembled on the factory floor
FG
Finished goods inventory
