University:
Kentucky State University
Course:
ECO 301 | Microeconomics
Academic year:

2019
Views:

174

Pages:

6
Author:

Stefni3cf

2-2 Learning Objective 1 Identify and give examples of each of the three basic manufacturing cost categories. . 2-3 Manufacturing Costs Direct Materials Direct Labor Manufacturing Overhead The Product . 2-4 Direct Materials Raw materials that become an integral part of the product and that can be conveniently traced directly to it. Example: A radio installed in an automobile . 2-5 Direct Labor Those labor costs that can be easily traced to individual units of product. Example: Wages paid to automobile assembly workers . 2-6 Manufacturing Overhead Manufacturing costs that cannot be traced directly to specific units produced. Examples: Indirect labor and indirect materials Wages paid to employees who are not directly involved in production work. Examples: maintenance workers, janitors and security guards. Materials used to support the production process. Examples: lubricants and cleaning supplies used in the automobile assembly plant. . 2-7 Non-manufacturing Costs Selling Costs Administrative Costs Costs necessary to get the order and deliver the product. All executive, organizational, and clerical costs. .