金陵科技学院-管理会计（双语）LECTURE 1.pptVIP

Manufacturing Costs Direct material is - Consumed in the manufacturing process Physically incorporated into the finished products Can be traced to products conveniently Considered a variable cost Direct labour For personnel who work directly on the manufacture of a product Usually treated as variable costs but sometimes NO In many industries, direct material is the largest proportion of the manufacturing cost and direct labour costs are the smallest * Manufacturing Costs Manufacturing overhead (P9) All manufacturing costs other than direct material and direct labour Also called indirect manufacturing costs Includes the cost of indirect material and indirect labour, depreciation and insurance on factory equipment, utilities and the costs of support departments for manufacturing Includes cost of overtime premium and idle time Manufacturing support departments do not work directly on producing products but are necessary for the manufacturing process to occur * * * * * * * * constant on a per-unit basis. If a product takes 5 pounds of materials each, it stays the same per unit regardless of one, ten or a thousand units are produced Fixed costs Per unit change inversely with the level of production. As more units are produced, the same fixed cost is spread over more and more units, reducing the cost per unit * * * * * * Usually treated as variable costs, however contractual arrangements sometimes mean that such labour is a committed cost and so does not vary with the level of production * ? 2009 Pearson Prentice Hall. All rights reserved. An Introduction to Cost Terms and classifications ? 2009 Pearson Prentice Hall. All rights reserved. You are graduated from JIT in 2017 * You become a PRODUCTION MANAGER in a PC firm. * Basically, you company produces only normal PC product, however, the existing of tablet PC like ipad and internet book are very competitive in the market. These two new products can be put into production. But the surplus product