Match one or more of the following terms with each definition below: a. Direct labor b. Direct materials c. Indirect labor d. Indirect materials e. Inventoriable product costs f. Manufacturing overhead g. Period costs __ ______I) Operating costs that are expensed in the period in which they are incurred. _____ ___ii) Materials that become a physical part of a finished product and whose costs are traceable to the finished product. ________ iii) All manufacturing costs other than direct materials & direct labor. _____ ___IV) Labor costs that is difficult to trace to specific products. _________ v) Materials whose costs cannot conveniently be directly traced to particular finished products. _____ ____VI) Product costs included in inventory, as required by GAAP. _____ ____Vii) the compensation of employees who physically convert materials into the company’s products; labor costs that are directly traceable to finished products. 2. Distinguish between direct and indirect costs. 3. Distinguish between prime cost and conversion costs.
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
- Match one or more of the following terms with each definition below:
a. Direct labor
b. Direct materials
c. Indirect labor
d. Indirect materials
e. Inventoriable product costs
f. Manufacturing
g. Period costs
__ ______I) Operating costs that are expensed in the period in which they are incurred.
_____ ___ii) Materials that become a physical part of a finished product and whose costs are traceable to the finished product.
________ iii) All
_____ ___IV) Labor costs that is difficult to trace to specific products.
_________ v) Materials whose costs cannot conveniently be directly traced to particular finished products.
_____ ____VI) Product costs included in inventory, as required by GAAP.
_____ ____Vii) the compensation of employees who physically convert materials into the company’s products; labor costs that are directly traceable to finished products.
2. Distinguish between direct and indirect costs.
3. Distinguish between prime cost and conversion costs.
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