Textbook Notes (362,793)
Canada (158,054)
Accounting (526)
ACC 406 (128)
Chapter 1

Chapter 1 & 2 ACC 406.docx

2 Pages
Unlock Document

Ryerson University
ACC 406
Anthony Chan

Chapter 1: Introduction to Management Accounting Chapter 2: Basic Cost Concepts and Classifications What is cost?  Cost means resources used to actualize a specific object (cost objective)  In general, cost refers to value forgone to achieve a purpose  In specific, cost refers to economics resources paid for goods and services Manufacturing companies have 3 inventory accounts: 1) Raw material Inventory Account 2) Work in Process Inventory Account 3) Finished Goods Inventory Account  In manufacturing accounting, there are 3 cost components: 1) Direct Materials  These inputs physically become part of the product  Eg. Paper to produce books 2) Direct Labor  Wages paid for those employees who convert direct materials into product  Eg. Wages paid to assembly line workers 3) Overhead: includes all other cost associated with the process (except for direct loss  Eg. Factory rent, factory utilities repair and maintenance, insurance, indirect materials, indirect labour Seven Cost Equations for Manufacturing Companies: 1) Beginning Direct Material Direct Material Purchased Direct Material Inventory + = Available for sale 2) Direct Material for use Ending Direct Material Direct material used - = 3) Direct material for use Direct labour Overhead Total manufacturing + + = cost added 4) Total manufacturing cost Beginning work in Total manufacturing cost added + process inventory in progress = 5) Total manufacturing cost
More Less

Related notes for ACC 406

Log In


Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.