MGMT 30B Study Guide - Midterm Guide: Financial Statement, Finished Good, Direct Labor Cost
26 Feb 2016
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Direct materials: all the raw materials integral to the product itself and the materials can be traced back to the product directly. Direct labor: labor costs that are physically and traceable to the product itself. Manufacturing overhead: where we throw everything not direct labor or direct materials. All manufacturing costs not traced to actual product i. Indirect materials (material costs not traced to the product itself): pencil, paper, clock-in machine. Indirect labor (labor costs not traced to the product itself): security guard, sales people, designer of shoes, janitor. Manufacturing equipment costs (actual equipment cost): repairs and maintenance, utilities, insurance, tax, depreciation. Administrative: salary of ceo, taxes paid on administrative building. Fixed costs: cost doesn"t change regardless of level of activity. Average fixed cost decreases with more activity and will change. Variable costs: cost will change with level of activity. Average variable cost per unit will not change. Mixed costs: has variable and fixed cost components.
