BMGT 221 Chapter Notes - Chapter 3: Direct Labor Cost, Total Absorption Costing, Deutsche Luft Hansa

• School: University of Maryland
• Department: Business and Management
• Course: BMGT 221
• Professor: Gary Bulmash

Document Summary

Absorption costing: used to determine product costs: all manufacturing costs (fixed and variable) are assigned to units of production, units are said to fully absorb manufacturing costs. Most countries require some form of absorption costing for both external financial reports and for tax reports. Diverse outputs: used extensively in service industries hospital law firms. Movie studios accounting firms advertising agencies repair shops. Manufacturing costs are categorized into three broad categories: direct materials, direct labor, manufacturing overhead. Measuring direct materials cost bill of materials: document that lists the type and quantity of each type of direct material needed to complete a unit of product. Materials requisition form: 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. Job cost sheet job cost sheet: records the materials, labor and manufacturing overhead costs charged to that job.