AFM102 Chapter Notes - Chapter 2: Employee Benefits, Financial Statement, Variable Cost
18 Oct 2017
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Considering the costs: review: management focus, planning, directing and motivating, controlling, need of information, relates to costs from an accounting pov, prepare external financial reports, prepare planning budgets, make decisions. Indirect labour: the labour costs of janitors, supervisors, material handlers, and other factory workers that cannot be conveniently traced directly to particular products: manufacturing overhead: all costs associated with manufacturing except direct materials and direct labour (everything else) Less obvious: classification of ide time and overtime premiums of production workers: overtime premium: the extra hourly wage rate paid to workers who must work above their normal time requirements, classification depends on cause of overtime. Job-specific reason: direct job cost: normal overtime e. g. peak production needs: indirect charge. Product costs versus period costs: product costs: all costs that are involved in the purchase or manufacture of goods. In the case of manufactured goods, these costs consist of direct materials, direct labour, and manufacturing overhead.
