BU467 Chapter Notes - Chapter 5: General Ledger, Financial Statement, Finished Good
Document Summary
Product costs: those costs involved in either making or purchasing a product; often called manufacturing or inventoriable costs: direct materials + direct labour = prime costs, direct labour + manufacturing oh = conversion costs. Period costs: the operating costs that are not part of making or purchasing a product (sales and admin) See exhibit 5. 3 and 5. 4 for a better breakdown of cost allocation and cogs calculation. Assigning product costs to individual goods or services. Product costs: direct and indirect costs of producing goods or services. Process costing: allocating both direct and oh costs to continuous-flow processing lines: generally used for mass-produced products, direct and indirect costs are traced and allocated to production departments and then allocated to units. Job costing: the process of assigning costs to custom products or services: direct materials and labour are traced to individual jobs, and production oh is allocated, service industry organizations.
