definitions
external parties, outside information, compiling and presenting financial information to outsiders, (creditors, stockholders, regulators), focuses on PAST events, must follow GAAP
What is financial accounting?
Factory labor costs that can be easily traced to individual units of product.
What is direct labor?
A cost that can be easily and conveniently traced to a specified cost object
What is a direct cost?
Direct labor, direct materials, and factory overhead
What is a manufacturing cost?
internal management, focuses on FUTURE events, does not follow GAAP, inside people
What is managerial accounting?
All manufacturing costs except direct materials and direct labor.
What is factory/manufacturing overhead?
A cost that cannot be easily and conveniently traced to a specified cost object.
What is an indirect cost?
Selling and administrative costs
What are non-manufacturing costs?
Anything for which cost data are desired. Either a direct or indirect cost
What is a cost object?
Small items of material such as glue and nails that may be an integral part of a finished product, but whose costs cannot be easily or conveniently traced to it.
What are indirect materials?
direct materials and direct labor
What is a prime cost?
All costs that are incurred to secure customer orders and get the finished product or service into the hands of the customer.
What is a selling cost?
any materials that go into the final product
What are raw materials?
The labor costs of janitors, supervisors, materials handlers, and other factory workers that cannot be conveniently traced to particular products.
What is indirect labor?
labor and overhead
What are conversion costs?
All executive, organizational, and clerical costs associated with the general management of an organization rather than with manufacturing or selling.
What is an administrative cost?
Units of product that are only partially complete and will require further work before they are ready for sale to the customer.
What is work in process?
Units of product that have been completed but not yet sold to customers.
What are final goods?
All costs that are involved in acquiring or making a product. Raw materials, work in process, and finished goods
What is product cost?
When the cost is added to asset account
What is capitalizing a cost?