Management and Organizational Studies 3370A/B Lecture Notes - Lecture 5: Cost Driver, Direct Labor Cost, Subledger

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 3370A/B
• Professor: Bill Dawson

Document Summary

A costing method that includes all manufacturing costs (dm, dl and variable and fixed oh costs) as part of the cost of a finished unit of product. Synonymous with full costing: another name for absorption costing. Since one unit of product (litre, kg, bottle) is indistinguishable from any other unit of product, each unit is assigned the same average cost. Classify manufacturing costs into 3 broad categories: direct materials, direct labor, manufacturing overhead. Measuring direct materials cost: bill of materials, a record that lists the type and quantity of the materials required to make a product. Issued when an agreement has been reached with the customer concerning the quantities, prices and shipment date for the order. Measuring direct labor cost: dl is handled in same way as direct materials cost, dl consists of labor charges traced to job. Second= employee identity badge: third= job itself.