22107 Lecture Notes - Lecture 9: Fixed Cost, Combined Gas And Steam, Variable Cost
Document Summary
Direct labour: labour that can easily and conveniently be traced to particular products. Manufacturing costs: costs incurred in the factory or plant to produce a product; typically consist of three elements: direct materials, direct labour and manufacturing overhead. Manufacturing overhead also includes utilities, depreciation of factory equipment and buildings, rent, repairs and maintenance etc. Non-manufacturing costs: costs that are not related to the production process are classed as selling and administrative costs. These costs cannot be classed as inventory and must be immediately expensed in the profit and loss statements. Benefits of jit manufacturing: reduced waste and scrap. Improved product quality: lower overall production costs (although the costs of raw materials may increase in some cases, lower labour costs, reduced inventory, reduced processing time. 320 000 + (20 000 - 18 000) Beg. finished goods inventory + cogm = cog available for sale.
