Cost of Goods Sold and Cost of Goods Manufactured
Factory Overhead
consists of all manufacturing costs that are not direct materials or direct labor
Cost of goods sold
cost of goods available for sale - finished goods ending inventory
Conversion cost
direct labor + overhead
Prime cost
direct materials cost plus direct labor cost
Freight In
The transportation cost to ship goods into the purchaser's warehouse; therefore, it is freight on purchased goods.
Total Goods Placed In Process
Total Manufacturing Cost + Work in Process Beginning
Total manufacturing cost
the sum of materials used, labor, and overhead for the period
Raw materials
Components that will become part of the finished product but have not yet been used in production
Freight out
Cost of freight on shipments to customers, which is included in the income statement as a selling expense
Freight-out
Cost of freight on shipments to customers, which is included in the income statement as either a part of cost of goods sold or as a selling expense
Goods Available for Sale
Cost of goods manufactured + finished goods beginning
Cost of goods sold
Cost of the inventory that was sold during the period
Freight-in
Cost to transport inventory to the company, which is included as part of the inventory cost
Finished goods
Inventory items for which the manufacturing process is complete
Inventory
Items a company intends for sale to customers
work in process inventory
Products that have started the production process but are not yet complete at the end of the period
Net Purchases
Purchases less purchase returns and allowances less purchase discounts plus freight in.
Raw Materials Used
Raw Materials Available for use - Raw Materials Ending Inventory
Raw Materials Available for Use
Raw Materials Beginning + Raw Materials Purchased
Direct Labor
The common terms between prime cost and conversion cost
Period Costs
all costs in the income statement other than cost of goods sold
Direct Labor
labor costs that can be easily traced to individual units of product
Product cost
sum of the costs assigned to a product.
Cost of Goods Manufactured
the cost of manufacturing the goods that were finished during the period.