Chapter 1 Managerial Accounting and Cost Concepts Questions And Answers
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Course
Managerial Accounting 12th edition
Institution
Managerial Accounting 12th Edition
Raw Materials - ANS materials that go into the final product; the finished product of one company can become the raw materials of another company; MAY INCLUDE DIRECT AND INDIRECT MATERIALS
Direct Materials - ANS those materials that become a integral part of the finished product ...
Chapter 1 Managerial Accounting and
Cost Concepts Questions And Answers
Raw Materials - ANS materials that go into the final product; the finished product of one
company can become the raw materials of another company; MAY INCLUDE DIRECT AND
INDIRECT MATERIALS
Direct Materials - ANS those materials that become a integral part of the finished product
and whose cost can be conveniently traced to the finished products: ex. seats purchased from a
subcontractor to install in it airline
Indirect Materials - ANS are includes as part of manufacturing overhead. ex. glue to make
a chair
Direct Labor - ANS labor that can be easily traced to individual units of product
Indirect Labor - ANS labor cost that cannot be physically traced to particular products;
treated as manufacturing overhead.
ex. janitors, supervisors, night security
*impossible to accurately trace their cost to specific units of product*
Manufacturing Overhead - ANS includes all manufacturing costs except direct materials
and direct labor.
Elements of manufacturing costs - ANS 1. Direct materials
2. direct labor
3. manufacturing overhead
Manufacturing Costs - ANS 1. Selling costs
2. admin. costs.
Selling costs - ANS include all costs that are incurred to secure customer orders and get
the finished product.
ex. advertising, sales travel, sales commissions
administrative costs - ANS include all costs associated with the general management of an
organization rather than with man. or selling.
ex. compensation, general accounting, public relations,
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