establishing a basic strategy, selecting a course of action, and specifying how the action will be implemented.
Define Directing and Motivating
mobilizing people to carry out plans and routine operations
ensuring that the plan is carried out and modified as circumstances change
concerned with providing information to managers
concerned with providing information to stockholders, creditors, and others who are outside the organization.
any materials that are used in a final product
those materials that become an integral part of the finished product and whose costs can be convenientl traced to the finished product
Materials such as solder and glue and are included as part of manufacturing overhead
consists of labor costs that can easily be traced to individual units of product. Ex. assembly-line workers at Toyota
Labor costs that cannot be physically traced to particular products
Includes all manufacturing costs except direct materials and direct labor. Includes indirect materials, labor, maintenance and repairs. Also heat and light, property taxes, depreciation, and insurance on manufacturing facilities.
What are the 2 categories of nonmanufacturing costs?
Selling Costs and Administrative costs
all costs that are incurred to secure customer orders and get the product to the consumer
all costs associated with general management of an oganization rather than with manufacturing or selling. Ex. executive compensation, general accounting, secretarial, public relations, and similar costs.
all costs included with acquiring or making a product. Ex. direct materials, direct labor, and manufacturing overhead. Generally assigned to an inventory account. Also known as inventoriable goods.
All costs that are not product costs. The sales commissions and rental costs of administrative offices are period costs. They are not included as part of the cost of either purchased or manufactured goods. All selling and admin costs are period costs
sum of direct materials cost and direct labor cost
used to describe direct labor and manufacturing overhead because these costs are incurred to convert materials into the finished product.
materials that are used to make a product
Work in Process
consits of units of product that are only partially complete and will require further work before they are ready for sale to a customer.
consist of completed units of product that have not been sold to customers
Basic equation for inventory accounts
beginning balance + additions to inventory - Withdrawals from inventory = Ending Balance