Beruflich Dokumente
Kultur Dokumente
Lecture 05
• Comparing Merchandising and Manufacturing
Activities
• Manufacturing Costs
• Classifications of Costs
• Nonmanufacturing Costs
• Product Costs Versus Period Costs
• Comparing Merchandising and Manufacturing
Activities Financial Statement
• Manufacturing Cost Flows
Inventory Flows
Beginning
Additions Available
balance + $$$ = $$$$$
$$
_ Withdrawals Ending
Available
$$$$$ $$$ = balance
$$
MCQs Test
If your bank balance at the beginning of the month
was $1,000, you deposited $100 during the month,
and withdrew $300 during the month, what would
be the balance at the end of the month?
A. $1,000.
B. $ 800.
C. $1,200.
D. $ 200.
Answer
If your bank balance at the beginning of the month
was $1,000, you deposited $100 during the month,
and withdrew $300 during the month, what would
be the balance at the end of the month?
$1,000 + $100 = $1,100
A. $1,000. $1,100 - $300 = $800
B. $ 800.
C. $1,200.
D. $ 200.
Product Costs
Manufacturing Work
Raw Materials Costs In Process
Beginning raw
materials inventory
• B. $ 910,000
= Total work in process
during the period $ 960,000
• C. $ 760,000 – Ending work in
process inventory 200,000
• D. Cannot be determined.
= Cost of goods
manufactured $ 760,000
Product Costs
Work
In Process Finished Goods
Minutes Talked
Variable Cost Per Unit
The cost per long distance minute talked is
constant. For example, 1 Rupee per minute.
Telephone Charge
Per Minute
Minutes Talked
Total Fixed Cost
Your monthly basic telephone bill probably does
not change when you make more local calls.
Telephone Bill
Monthly Basic
Variable Total variable cost changes Variable cost per unit remains
as activity level changes. the same over wide ranges
of activity.
Fixed Total fixed cost remains Fixed cost per unit goes
the same even when the down as activity level goes up.
activity level changes.
Direct Costs and Indirect Costs
Direct costs Indirect costs
• Costs that can be • Costs cannot be easily and
easily and conveniently conveniently traced to a
traced to a unit of product unit of product or other
or other cost objective. cost object.
• Examples: direct material • Example: manufacturing
and direct labor overhead
Differential Costs and Revenues
Costs and revenues that differ among
alternatives.