Manufacturing costs that cannot be easily traced directly to specific units. produced[r]
(1)PowerPoint Authors:
Susan Coomer Galbreath, Ph.D., CPA Charles W Caldwell, D.B.A., CMA Jon A Booker, Ph.D., CPA, CIA Cynthia J Rooney, Ph.D., CPA
Copyright © 2014 by The McGraw-Hill Companies, Inc All rights reserved.
Managerial Accounting and Cost Concepts
(2)Learning Objective 2-1
Identify and give
examples of each of the three basic
(3)The Product
Costs
Direct Materials
Direct Materials
Manufacturing Overhead
Manufacturing Overhead
Direct Labor
(4)Direct Materials
Raw materials that become an
integral part of the product and that can be conveniently traced directly
to it.
Example: The flour in the dough.
(5)Direct Labor
Those labor costs that can be easily traced to individual units of product.
Example: Wages paid to bakers.
(6)Manufacturing Overhead
Manufacturing costs that cannot be easily traced directly to specific units
produced.
Examples: Indirect materials and indirect labor
Examples: Indirect materials and indirect labor
Materials used to support the production
process
Examples: lubricants and cleaning supplies to
maintain the bakery equipment
Materials used to support the production
process
Examples: lubricants and cleaning supplies to
(7)Nonmanufacturing Costs
Selling Costs Selling
Costs
Costs necessary to secure the order and
deliver the product.
Costs necessary to secure the order and
deliver the product.