AC 212 Lecture Notes - Lecture 2: Steering Wheel, Toyota Rav4, Finished Good
4 Jan 2018
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Lo 1 distinguish among service, merchandising, and manufacturing companies. There are three inventory accounts in manufacturing companies: raw materials, all raw materials used in manufacturing or building a product. Lo 2 describe the value chain and its elements. The activities that add value to the company"s products and services. Administration is not part of the value chain. Lo 3 distinguish between direct and indirect costs. Anything for which managers want a separate measurement of cost. Examples: individual units (a specific, custom-ordered prius, different models (the prius, rav4, and corolla, departments (human resources, r&d, legal) A cost that can be traced directly to the cost object. Examples: steering wheel used in the production of a car would be a direct cost. A cost that cannot be directly traced to cost object (manufacturing overhead). Example: cost of lubricants used in the manufacture of a car, a plant manager"s wages. All direct and indirect costs must be assigned to the cost object.
