Disc 2-3

Easily Traceable to each product; Can be easily counted/measured; Steering wheel on a car; four tires on a car

• direct materials

• direct labor

• manufacturing overhead

• conversion cost

Touch Labor:  Factory Laborers touching up paint on cars manufactured

• Manufacturing Overhead

• Direct Labor

• Conversion Costs

• Direct Materials

Indirect Materials:  paint on a car, fabric on car seats,  Indirect Labor: Factory janitorial staff wages/salary, Factory Supervisor salary, and ALL Other Costs associated with running the factory:  Factory utilities, rent on the factory building, insurance on the factory building, depreciation on factory equipment, etc.

• Manufacturing Overhead

• Conversion Costs

• Direct Materials

• Direct Labor

Direct Labor + Manufacturing Overhead

• Prime Cost

• Direct Materials

• Raw Materials

• Conversion Cost

Cost to CONVERT Direct Materials into the final product

• Prime Cost

• Direct Materials

• Conversion Cost

• Direct Labor

Direct Labor + Direct Materials

• Prime Cost

• Conversion Cost

• Raw Material

• Manufacturing Overhead

Direct materials, direct labor, manufacturing overhead, conversion costs and prime costs are all examples of

• product costs

• production costs

• variable costs

• fixed costs

Costs that increase or decrease (in total) with changes in activity levels/cost drivers.  A variable cost expressed on a PER UNIT basis remains the same.

• Product Cost

• Fixed cost

• Mixed Cost

• Variable Cost

Direct Materials, Direct Labor (if hourly—wages), Indirect Materials, & Factory Utilities are all examples of?

• Variable Costs: Manufacturing and Product Costs

• Variable costs: Non- manufacturing and Period Costs

• Fixed Costs: Manufacturing and Product Costs

• Fixed costs: Non- manufacturing and Period Costs

Office supplies, utilities in the office, sales Commissions (the more products are sold, the higher the Sales Commissions expense will be) are examples of?

• Variable Costs: Non-manufacturing and Period Cost

• Variable Costs: Manufacturing & Product Cost

• Fixed Costs: Non-manufacturing and Period Cost

• Fixed Costs: Manufacturing & Product Cost