ARBUS102 Lecture Notes - Lecture 15: Finished Good, Variable Cost, Fixed Cost

• School: University of Waterloo
• Department: Arts and Business
• Course: ARBUS102
• Professor: Peter Blake

Document Summary

Cgs = opening fg inventory jan 1 + cost of goods manufactured (during jan) ending fg inventory. Cost of goods manufacturing = opening work-in-process inventory + total manufacturing costs for period ending work-in-process inventory. Total manufacturing costs for period = raw materials used in production + direct labour for the period. + manufacturing overhead for the period (indirect labour, utilities, rent, supplies, insurance, etc. ) Raw materials used = opening rm + purchases in period rm ending. Schedule of cost of goods manufactured: direct materials. = rm used in production: direct labour, manufacturing overhead. Variable costs total $ amount varies directly with changes in activity base (sales volume) Relevant range: range over which the per unit cost stays constant. Fixed costs: total dollar amount remains constant over relevant range. Mixed costs contain both a variable and a fixed element e. g. franchise fee: ,000/yr + 3% of sales variable. Mixed costs can be expressed as y = a + bx.