ACCT 116 Lecture Notes - Lecture 3: A143 Road, Ob River, Finished Good

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A managerial costing system should provide cost data to help managers plan, control, and make decisions. In absorption costing, all manufacturing costs, both fixed and variable, are assigned to units of product units are said to fully absorb manufacturing costs. Under absorption costing, product costs include all manufacturing costs. Bill of materials: a document that lists the type and quantity of each type of direct material needed to complete a unit of product. When an agreement has been reached with the customer concerning the quantities, prices, and shipment date for the order, a production order is issued. The production department then prepares a materials requisition form. The materials requisition form is a document that specifies the type and quantity of materials to be drawn from the storeroom and identifies the job that will be charged for the cost of the materials.

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