Chapter 2 homework set – Flashcards
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Company paid health insurance, retirement plan contributions, payroll taxes, and paid vacations.
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Fringe Benefits
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The cost of transforming direct materials into finished goods.
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Conversion Costs
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Direct material plus Direct labor.
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Prime Costs
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The allocation process results in a less precise cost figure being _____ to the _______.
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assigned, cost objects
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Include the costs of all resources used throughout the value chain.
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Total costs
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treated as assets on the balance sheet.
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Inventoriable product costs
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Steel, tires, upholstery used in the assembly of a car. Can trace cost of materials to specific units or batches.
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Direct costs
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cannot be directly traced to a cost object
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Indirect costs
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can be directly traced to a cost object
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Direct costs
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when manufacturing companies sell their finished products, the costs of those finished products are removed from inventory and expensed as this.
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Cost of goods sold
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include R&D, marketing, distribution, and customer service costs
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Period costs
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GAAP requires companies to use only this for external financial reporting.
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Inventoriable product costs
