Lesson 8
What does (COGS) mean?
Cost of Goods
Definition of Manufacturing
makes goods to sell
What is Job order costing?
Job order costing is used when all of the costs of the products will be charged to one unit of product.
How do you calculate sales in managerial accounting?
Multiply Price by Units. Multiply the selling price of each unit by the total number of units sold.
Definition of Merchandising
the activity of promoting the sale of goods, especially by their presentation in retail outlets.
What is Process costing
Process costing is an accounting methodology that traces and accumulates direct costs and allocates indirect costs of a manufacturing process. Costs are assigned to products, usually in a large batch, which might include an entire month's production
What is an effect on the net income of changes in cost?
Your business must make a profit or go extinct. This makes effective control essential to ensuring that the firm still has money left over after all the bills are paid. Cost of goods sold, also called cost of sales, often is the largest expense a business incurs.
Differences between Manufacturing and Merchandising
The most significant difference between a manufacturing company and a merchandising business is that a manufacturer makes goods to sell and a merchandiser buys or acquires goods for resale.
What are the benefits of a costing system?
Provides organized records, Adapts to the production process, and shows if products are profitable.
How do you find the Sales Price?
Multiply the sales price by the expected sales volume to find the expected revenue.
Compare Merchandising and Manufacturing
Simple costing Markup and buys a finished product resell.
What formula is used to get the total unit cost?
Direct Materials Unit Cost + Conversion Unit Cost = Total Unit Cost
What is it called when money is left over?
Profit
What are the three costing elements
Direct materials, direct labor, and factory overhead
What is the standard direct-labor rate
the total hourly cost of compensation, including fringe benefits