BUSI 2201 Lecture Notes - Lecture 2: Finished Good, Indirect Costs
19 Jan 2017
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Resell tangible products that are purchased from suppliers (retail, grocery stores, bookstores, etc. ) They have inventory of purchased goods (assets) Convert raw materials into finished goods using labor and equipment. Raw materials inventory materials used in manufacturing. Work-in-process inventory goods that are in process but not yet complete. Finished goods inventory completed goods that have not yet been sold. Do not work directly with the manufacturing process (security, cleaning crews, administrative salaries) Costs for manufacturer: product costs: costs spent inside the manufacturing plant. Costs=plant costs: period costs (operating expenses): costs spent outside the manufacturing plants. They are expensed in the period in which they are incurred. To compute cost, we need to assign all direct and indirect costs to the final product. Manufacturing cost per sofa= direct materials + direct labour + Direct materials and direct labor are traced to each sofa.
