Test 1 Flashcards
Direct costs
direct materials and direct labor
Indirect costs
Indirect materials (glue) and indirect labor (janitor)
Product Costs
Direct materials
Direct labor
Manufactoring overhead
Prime Costs
Raw materials
Direct Labor
Conversion Costs
Direct Labor + MOH (indirect labor)
Period Costs
Everything that isn’t a product cost
(selling expenses, admin expenses, accounting department)
Gross Profit
Revenue - COGS
Describe the flow of Inventory
RM -> WIP (DL and MOH added) -> FG ->COGS
What kind of cost is insurance on the plant?
MOH
What kind of cost is depreciation?
MOH
What is lost inventory called?
Shrinkage
What kind of cost is a delivery expense?
Period Cost (selling expense)
What are the two cost accumulation systems?
Job order costing
Process costing
What are the four quality management costs?
Prevention
Appraisal
Internal failure
External failure
Prevention costs
Avoiding poor quality stuff:
- employee training
- evaluation of supplies
- preventative maintanence on equipment
