Direct Materials-directly put into Finished Products,Sales

Invoice, Sales Taxes, Custom duties, Marine insurance,

freight in

Salary, Bonus, SSS, taxes, allowances

Health Insurance, Group Life insurance, Holiday, vacation pay,

pension, post retirement benefits, workers compensation exp., Direct Labor - Wages
unemployment taxes, overtime rush order directly work cost (resources given up to achieve objective) vs.expense (charged against revenue during acctg. period)
converting raw
materials to finished Direct Cost (traced directly to specific cost object) VS Indirect Cost (can't be identified with specific cost object)
goods
Manufactring
Based on Behavior in Activity Level
Cost Elements
Fixed Costs- don't change within production; FC/ unit decreases as per activity increases
Indirect Materials- not directly associated with product; part of product but
not cost efffective traceable ex. glue,paints, varnishes, nails. screw; not
Variable Cost- incurred actually produces of products; increase as per activity increase but cost/unit remains; total VC varies as per activity
part (solvents,lubricants, cleaning fluids Mixed Cost- has Fixed & Variable Cost

Indirect Labour- factory labour cost traced to product ex. factory

Based on Purpose (A) External Reporting
supervisor, factory cleaning staffs, factory receiving personnel,
factory maintenance staff, inspection worker, time keeper
Manufacturing Overhead
Product Cost- Direct Materials, Direct Labour, Manufacturing Overhead (Indirect Materials, Indirect Labour, Other Indirect Cost)
*Periodic Cost-** Selling & Administrative Expenses Prime Cost (DM +DL);
Depreciation- Factory Machinery, Factory Furniture, Factory
Office Equipment (Computers) **COST CLASSIFICATIONS Conversion Cost (DL
(B) Decision Making + MOH)
Other Factory Cost- Factory utilities, insurance on factory
buildings & equipment, machinery repairs & maint. Rent on Relevant Cost- expected future cost as per choices
factory building, machinery & equipment, overtime premium paid
on factory workers (direct & indirect labour) Irrelevant Cost- exist no matter which alternative is selected
(C) Performance Evaluation
Opportunity Cost- benefits sacrificed selecting one alternative over another; income lost by not using
limited resources in its best alternative use; imputed cost

Merchandise: Beg. Inventory + Purchases - Ending Inventory Controllable Cost-inccurred/influenced by management evaluation (VP Mftg-rent decision; line Supervisor
decide employee in line)
Manufacturer: Beg. FG Inventory + COG Manufactured- Non-Controllable Cost-can't influence by management (Controllable/uncontrollable by other; depreciation exp.
Ending FG Inventory policy decided by corporate level)

Sunk Cost-already incurred & can't change, irrelevant & ignored in decision making
Other Cost
Committed Cost-commitment engage in business for long-term
COS Components Discretionary- may or not spent depends on manager ex. advertising, security guard salary, RD, Training
COGM: Beg. WIP +TMC (DM+DL+MOH)=Total Cost WIP-Ending Differential Cost-cost between two alternatives
WIP Marginal Cost- necessary to produce one more unit
Engineered Cost- observable, relationship to output
Balance Sheet Presentation Implicit Cost-not exist/cash outlays but needed for decision;nonetheless; not recorded
Inventories: Finished Goods + Carrying Cost- associated holding inventory ex. rent, utilities storage,insurabce taxes invty, cost employee
WIP + Raw Materials damage, obsolate, markdown, financing inty OC space can be used for other purpose, OC money invested in
inventory