All of the materials that go into creating manufactured goods are called “Raw Materials.” Raw materials appear in two tastes: Direct Materials and Indirect Materials. Direct materials are the raw materials that develop into component of the manufactured goods. For example, bricks, shingles, and bath tubs would be the straight resources when building a house. Paper would be a direct material when making grocery bags. Seems easy, but there is a catch.
Total Factory Cost Definition: Total factory cost is equal to total direct materials cost plus direct labor cost plus Factory overhead. Formula of prime cost can be written as: Prime cost = Direct materials + Direct labour
Job Order Costing Questions and Answers: Questions: Cost accounting is said to consist of three different phases. Name them. See answer. Name four control accounts concerned primarily with cost determination. See answer. What subsidiary record or ledger supports each of the control accounts mentioned
Job Order Costing in Service Companies: Job order costing is also used in service organizations such as law firms, movie studios, hospitals, and repair shops, as well as manufacturing companies. In a law firm, for example, each client represents a “job,” and the costs
Job Order Costing System: After studying job order costing system chapter you should be able to: Distinguish between process costing and job order costing and identify companies that would use each costing method. Identify the documents used in job order costing system. Compute predetermined
Sales Budget: Learning Objectives: Define and explain sales budget. Give and example of sales budget. Contents: Definition and explanation of sales budget Example Definition and Explanation: A sales budget is a detailed schedule showing the expected sales for the budget period; typically, it is expressed in both dollars and units