ACCT2320 - 2.1

direct materials

• employee wages & DIRECTLY associated with creation of a finished product

• raw materials than can be physically and directly associated with a finished product

• cannot be traced directly to specific units

manufacturing overhead (moh)

• employee wages & DIRECTLY associated with creation of a finished product

• raw materials than can be physically and directly associated with a finished product

• cannot be traced directly to specific units

direct labour

• employee wages & DIRECTLY associated with creation of a finished product

• raw materials than can be physically and directly associated with a finished product

• cannot be traced directly to specific units

direct materials: _ of the product and can be directly traced to it

flour, sugar, eggs in a cake

radio in a car

syrup in a soft drink

• raw materials

• direct labour

• manufacturing overhead

bakers of a cake

factory workers

sewers for a clothing manufacturer

• raw materials

• direct labour

• manufacturing overhead

manufacturing overhead has two types:

indirect _

janitors, supervisors, security guards for factory

• direct labour

• indirect labour

oil for machines and cleaning supplies

• direct materials

• indirect materials

a general cost of all production - several, a lot

ex: general power failure

• direct labour

• manufacturing overhead