accounting chap 1
selling expenses administrative expenses
2 things that make up period costs
planning directing controlling
3 management functions of managerial accounting
direct materials direct labor indirect materials indirect labor other indirect costs
5 things that make up products costs
manufacturing costs
consist of activites and processes that convert raw materials into finished goods classified as direct materials, direct labor, and manufacturing overhead
manufacturing overhead
consists of costs that are indirectly associated with the manufacture of the finished product
product costs
costs that are a necessary and integral part of producing the finished product
period costs
costs that are matched with revenue of a specific time period rather than included as part of the costs of a salable product. these are the non manufacturing costs
indirect materials
do not physically become apart of the finished product they are impractical to trace to the finished product because their physical association with the finished product is too small in terms of cost
SOX act
enacted by US Congress to help prevent lapses in internal control
total cost of work in process - ending work in process inventory
how to find cost of goods manufactured
total manufacturing costs + beginning work in process - ending work in process
how to find cost of goods manufactured
beginning finished inventory + costs of goods manufactured - ending finished inventory
how to find cost of goods sold
beginning raw materials + raw materials purchased - ending raw materials
how to find direct materials used
beginning finished inventory + costs of goods manufactured - ending finished inventory
how to find the costs of good sold
beginning work in process + total manufacturing cost
how to find total cost of work in process
manufacturing overhead
indirect materials and indirect labor are classified as __________ ________
directing
involves coordinating a company's diverse activities and human resources to produce a smooth running operation
controlling
process of keeping the company's activities on track
direct materials
raw materials that can by physically and directly associated with the finished product during the manufacturing process
planning
requires managers to look ahead and establish objectives
indirect labor
work of employees who have no physical association with the finished product factory maintenance worker, supervisers
direct labor
work of factory workers and laborers who can be physically and directly associated with converting raw materials to finished goods
