Management and Organizational Studies 3370A/B Chapter Notes - Chapter 2: Indirect Costs, Financial Statement, Balance Sheet

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

Document Summary

General cost classifications: manufacturing costs, direct materials, raw materials- materials that go into the final product are called. May include both direct and indirect materials: direct materials- those that become an integral part of the product and can be physically and conveniently traced directly to it. Indirect materials- either cannot or it is not worth the expense or effort to trace the costs to the end product. Included as part of manufacturing overhead: direct labour, consists of labour costs that can be easily (physically and conveniently) traced to individual units of product. Indirect labour- costs that can"t be easily traced to the creation of products (or if it would be costly or inconvenient) are called indirect labour and are treated as manufacturing overhead: manufacturing overhead. Includes all costs of manufacturing except direct material and direct labour: example: Indirect materials- materials used to support the production process. Lubricants and cleaning supplies used in the automobile assembly plant.