COMM 305 Chapter 2: Managerial Cost Concepts and Cost Behavior Analysis (Weygandt: Managerial Accounting, 4th Ed)
18 Jan 2017
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Chapter 2) managerial cost concepts and cost behavior analysis. Cost object - anything for which we want to calculate a cost. Manufacturing - consists of activities and processes that convert raw materials into finished goods. Raw material - basic material and part used in manufacturing process: direct material - can be physically and directly associated with finished product during manufacturing process. 2. indirect material - does not physically become part of finished product or can"t be traced because its physical association with finished product is insignificant. Direct labor - work of factory employees that can be physically and directly associated with converting raw materials into finished goods. Indirect labor - work of factory employees that has no physical association with finished product or work for which it is impractical to trace cost to goods produced. Manufacturing overhead - manufacturing costs that are indirectly associated with manufacture of finished product.
