ACCT 226 E2-2 DM,DL,MOH,Selling, Administrative

Cost of advertising in the newspaper

Selling

Sales commissions paid to the company's salespeople

Selling

Administrative

include all costs associated with the general management of an organization rather than with manufacturing or selling. Examples of administrative costs include executive compensation, general accounting, secretarial, public relations, and similar costs involved in the overall, general administration of the organization as a whole.

MOH

includes items such as indirect materials; indirect labor; maintenance and repairs on production equipment; and heat and light, property taxes, depreciation, and insurance on manufacturing facilities. Manufacturing, production, factory

Direct Labor

labor costs that can be easily (i.e., physically and conveniently) traced to individual units of product. Direct labor is sometimes called touch labor because direct labor workers typically touch the product while it is being made.

Selling

all costs that are incurred to secure customer orders and get the finished product to the customer. Examples of selling costs include advertising, shipping, sales travel, sales commissions, sales salaries, and costs of finished goods warehouses.

Direct Materials

materials that become an integral part of the finished product and whose costs can be conveniently traced to the finished product. This would include, for example, the seats that Airbus purchases from subcontractors to install in its commercial aircraft and the electronic components that Apple uses in its iPhones.

Wages of the company's accountant

Administrative

Wages of employees who assemble computers from components

DL

Cost of a hard drive installed in a computer

DM

Depreciation on equipment used to test assembled computers before release to customer

MOH

Wages of the assembly shops supervisors

MOH