ACCTG 102 Study Guide - Spring 2018, Comprehensive Midterm Notes - Depreciation, Income Statement, Earnings Before Interest And Taxes
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When these are combined there is a new name: Materials that you can easily and conveniently trace to a product. The wood is direct, the top was direct bc made for the table. Indirect materials would be what"s used to make it but its not easily detectable, usually buy these things in bulk, nails, screws, glue, farnish, feet, indirect because it"s used for all the different products. Easily and conveniently trace to a product. Those who actually work on the product, get their hands dirty, they"re making it. Indirect labor, those who are working in the factory but aren"t working on the product(maintenance, janitorial, sales) What makes it variable is that its total cost will change based off of production. Anytime the total cost for dm goes up for production its variable. Need to know all that bolded terms in ch1, test questions. Don"t want it, get rid of it easily.
