Accounting Week Homework

Accounting Week Homework

This is a direct cost, so it is variable. As we produce more of the object, there should be a direct relationship to the direct manufacturing labor costs. C. Manufacturing Overhead Costs can also be called indirect manufacturing costs or factory overhead costs. These are manufacturing costs that can NOT be traced directly back to the cost object. D. Indirect Materials Costs are materials that must be used in production, but cannot be traced to a direct relationship with the cost object. E.

Prime Costs are all the direct manufacturing costs; therefore we can say that the rime costs equal the direct materials costs plus the direct manufacturing labor costs. F. Conversion Costs are all the other manufacturing costs beyond the direct materials costs. A. The Direct Materials Cost consists of the costs of all materials which will eventually be used to produce the product. An example of a direct materials cost would be the cost of the aluminum can for bottling Pepsi cola, or the cost of any material used to create the product such as the cardboard to produce cardboard boxes.

I b. Direct Manufacturing-labor Costs include all the labor which can be traced directly to the cost object. This is a direct cost, so it is variable. As we produce more of the object, there should be a direct relationship to the direct manufacturing labor costs. The more we produce the more direct manufacturing labor costs we will incur. This would include the salaries of the line workers at a factory creating widgets as well as the salary of the direct supervisor. I I c. Manufacturing Overhead Costs can also be called indirect manufacturing sots or factory overhead costs.

These are manufacturing costs that can NOT be traced directly back to the cost object. An example of a manufacturing overhead cost could be the rent on the manufacturing facility or the insurance cost for the facility. I I d. Indirect Materials Costs are materials that must be used in production, but cannot be traced to a direct relationship with the cost object. An example of an indirect materials cost might be the office supplies for the manufacturing plant bookkeeping office, or the office manager salary for the manufacturing plant.

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