BUS 254 Chapter Notes - Chapter 3: Deutsche Luft Hansa, Cost Driver, Construction

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 254
• Professor: Arsineh Garabedian

Document Summary

Product-costing system accumulates the total cost of making products and helps to compute unit cost. Computation of cost of goods sold: managerial accounting. Planning, cost control, and decision making: cost management. Cost control and cost reduction: reporting to interested organizations. There is an ever-growing need for product cost information in relationships between firms and various outside organizations. Managers of service organization need product-cost information o. Service costs are used by automotive repair shops to set a price for various repairs. Every product is made up of three cost components: direct material, direct labor, manufacturing costs. As production takes place, manufacturing costs are tracked in the working-in process (wip) inventory account. After products are completed, the costs are transferred from. Wip inventory (credit: decrease) to finished goods inventory (debit: increase) When units are sold the finished goods inventory account is decreased (credit) and cost of goods sold is increased (debit)