MGMT 30B Study Guide - Final Guide: Gross Margin, Profit Center, Balanced Scorecard
26 Feb 2016
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General cost classifications= manufacturing cost components: direct materials, direct labor, manufacturing overhead i. Manufacturing overhead: indirect materials, indirect labor, manufacturing equipment costs (repairs, maint, utilities, insurance, tax, depreciation) Non-manufacturing costs (selling, general, & administrative costs) sg&a. Fixed costs: cost doesn"t change regardless of level of activity. Avg fixed cost decreases with more activity & will change. Variable costs: cost will change with level of activity. Average variable cost per unit will not change. Calculate direct materials (beg materials + purchases = raw mat avail. Compute a pre-determined overhead rate -pre-determined overhead = est total manufacturing overhead / estimated total allocation base. Allocated overhead per job (applied manufacturing overhead)= pre-determined overhead x actual amount of that job"s allocation base. Calculate product cost per unit = (direct materials + direct labor + total manufacturing overhead) / actual number of units produced. Actual manufacturing overhead: indirect materials + indirect labor + factory utilities.
