ACCT 2230 Chapter Notes - Chapter 2: European Cooperation In Science And Technology, Variable Cost, Fixed Cost
1 Nov 2017
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Those materials that become an integral part of a finished product and can be conveniently traced to it: indirect materials. Small items of material that may become an integral part of a finished product but whose costs of tracing exceed the benefits: direct labour. Those factory labour costs that can be traced easily to individual units of production: indirect labour. The labour costs of janitors, supervisors, materials handlers, and other factory workers that cannot be conveniently traced directly to particular products: manufacturing overhead. All costs associated with manufacturing except direct materials and direct labour: conversion cost. Direct labour cost + manufacturing overhead cost: prime cost. Direct materials cost + direct labour cost: overtime premiums. The extra hourly wage rate paid to workers who must work more than their normal time requirements: marketing or selling costs. All costs necessary to secure customer orders and get the finished product or service to the customer: administrative costs.
