COMM 305 Lecture Notes - Lecture 2: Behaviorism, Income Statement, Fixed Cost
4 Dec 2018
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Document Summary
Manufacturing consists of activities to convert raw materials into nished goods. Raw materials are basic materials and parts used in manufacturing. Raw materials that can be physically and directly associated with the nished product are called direct materials ie. our for bread, syrup for soft drinks, steel for cars. Work of factory employees that can be physically and directly associated with converting raw materials into nished goods is direct labour ie. bottlers at coca cola, typesetters at a newspaper. Costs that are indirectly associated with manufacturing of nished goods. All manufacturing costs that cannot be classi es as direct material and direct labour ie. indirect material, indirect labour, amortization on buildings. Raw materials that cannot be easily associated with the nished product. Do not physically become part of the nished product or too small to be considered. Considered part of manufacturing overhead ie. lubricants, cleaning supplies, polishing compounds.
