COMMERCE 2AB3 Lecture Notes - Lecture 2: Income Statement, Financial Statement, Finished Good
17 Jan 2017
School
Department
Course
Professor
Document Summary
In order for managers at companies to plan, direct, and control operations effectively, they need good information. An important type of information is related to costs. To answer these questions, managers need reliable and relevant cost information. Cost: an economic resource given up or forgone to accomplish a particular object. Cost object: anything for which we want to calculate a cost. Product, product line, or service, or a process for which cost information is measured and accumulated. Direct labour meets one or the other: functional. What function does it serve: behavior. How does the cost behave or vary/change. Manufacturing: consists of all activities and processes that convert raw materials into finished goods, about transformation (create the product) (costs are multiple) To obtain the materials that will be converted into the finished product, the manufacturer purchases raw materials. Raw materials: the basic materials and parts used in the manufacturing process. In production of cars you need plastic, steel,
