Chapter 2 - Job-order costing for manufacturing & service companies. This chapter presents the following content: Manufacturing costs, merchandising and manufacturing firms, common manufacturing overhead costs, nonmanufacturing costs,. | Prepared by Debby Bloom-Hill CMA, CFM 1 CHAPTER 2 Job-Order Costing for Manufacturing & Service Companies 2 Manufacturing Costs Direct Materials Cost of materials directly traceable to items produced Materials not directly traceable are indirect materials Direct Labor Cost of labor directly traceable to items produced Labor costs not directly traceable are indirect labor Manufacturing Overhead Cost of manufacturing activities other than direct materials and direct labor Slide 2-3 Learning objective 1: Distinguish between manufacturing and nonmanufacturing costs and between product and period costs. 3 Merchandising and Manufacturing Firms Slide 2-4 Learning objective 1: Distinguish between manufacturing and nonmanufacturing costs and between product and period costs. 4 Common Manufacturing Overhead Costs (Illustration 2-2) Slide 2-5 Learning objective 1: Distinguish between manufacturing and nonmanufacturing costs and between product and period costs. 5 Nonmanufacturing Costs . | Prepared by Debby Bloom-Hill CMA, CFM 1 CHAPTER 2 Job-Order Costing for Manufacturing & Service Companies 2 Manufacturing Costs Direct Materials Cost of materials directly traceable to items produced Materials not directly traceable are indirect materials Direct Labor Cost of labor directly traceable to items produced Labor costs not directly traceable are indirect labor Manufacturing Overhead Cost of manufacturing activities other than direct materials and direct labor Slide 2-3 Learning objective 1: Distinguish between manufacturing and nonmanufacturing costs and between product and period costs. 3 Merchandising and Manufacturing Firms Slide 2-4 Learning objective 1: Distinguish between manufacturing and nonmanufacturing costs and between product and period costs. 4 Common Manufacturing Overhead Costs (Illustration 2-2) Slide 2-5 Learning objective 1: Distinguish between manufacturing and nonmanufacturing costs and between product and period costs. 5 Nonmanufacturing Costs Nonmanufacturing costs (also known as period costs) are all costs that are not associated with the production of goods Selling Costs Costs associated with securing and filling customer orders . advertising, sales salaries, depreciation of sales equipment General and Administrative Costs Costs associated with the firm’s general management . human resources, accounting, corporate headquarters and other support costs Slide 2-6 Learning objective 1: Distinguish between manufacturing and nonmanufacturing costs and between product and period costs. 6 Product and Period Costs Product Costs Costs assigned to goods produced (. direct materials, direct labor, and manufacturing overhead) Included in inventory until goods sold Period Costs Costs identified with accounting periods (. selling and administrative expenses) Expensed in period incurred Slide 2-7 Learning objective 1: Distinguish between manufacturing and nonmanufacturing costs and between product and period costs. 7 Relationships .
