ACCT 2123 Lecture Notes - Lecture 2: Direct Labor Cost, Indirect Costs, Operations Management

• School: University of Oklahoma
• Department: Accounting
• Course: ACCT 2123
• Professor: Joe Dulin

Document Summary

Direct costs can be easily traced to a specified cost object. Like the leather in a shoe is a direct cost expensed to the purchaser. Indirect costs cannot be easily traced back to a specified cost object. Like campbell soup factory manager"s salary is an indirect cost to the a particular can of soup. Manufacturing costs: direct materials: raw materials that comprise a product that are integral parts of the finished product and are easily identified, direct labor: labor costs that can be easily traced to individual units of product. Only those costs associated with operating the factory are included in manufacturing overhead. Non manufacturing costs: selling costs: costs incurred to get the customer to order it and to give the product to the customer. Can be direct or indirect: administrative costs: costs of the general management of the company. Product costs: all costs involved in acquiring or making a product, direct and indirect costs and manufacturing overhead.