Student Handout Ch 02(1)
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Chapter 2: Student Summary Handout 1. The three types of companies (Today) a. Service companie s b. Merchandising companies c. Man ufa ctu ring compan ies i. Three ty pes of invent or y 1. Raw mat eri als inv ent ory ( RM) 2. or! in pr ocess inv ent ory ("#) $. %in ished go ods i nve nto ry (%&) 2. The v alu e cha in an d its e lement s i. Res ear ch and dev elo pme nt ( R') ii. esign iii. #r oducti on or pu rcha ses iv. Mar !e ti ng v. i st ri buti on vi . ust omer ser vi ce $. e fi ni ng cost a. ost ob *e cts b. irect costs and indirect c osts +. osts for internal decision ma!ing and e,ternal reporting (ed) a. Total costs for internal decision ma!ing b. "nventoriable product c osts for e,ternal reporting c. Merchandising companies- inventoriable product costs d. Manufacturing companies- inventoriable product costs i. irect mate ria ls ( M) ii . i rect la bor ( ) iii. Man ufa ctu ring ov erhead (M/0) 1. "ndi rect mat er ia ls 2. "ndirect labor $. /th er indi rec t manuf act uri ng cos ts e. #rime and conversion costs (%ri) f. dditional labor compensation costs . "nven toria ble produ ct costs and peri od costs shown in the financia l statemen ts a. Service companie s b. Merchandising companies c. Man ufa cturing compan ies i. alc ulati ng the c ost of g oods ma nufac tured a nd cost of good s sold d. ompa ring ba lance sh eets of the t hree typ es of org ani3a tion s 4. /ther cost terms used by managers (ed) a. ont rollab le versus unco ntrol labl e costs b. Relevant and irrelevant costs i. i ff eren ti al cost ii. Sun! cost c. %i ,e d and vari able costs d. 0ow manu facturing costs behave e. alculating total and average costs at different volumes
Transcript of Student Handout Ch 02(1)
Chapter 2: Student Summary Handout
1. The three types of companies (Today)
a. Service companies
b. Merchandising companies
c. Manufacturing companies
i. Three types of inventory
1. Raw materials inventory (RM)
2. or! in process inventory ("#)
$. %inished goods inventory (%&)
2. The value chain and its elements
i. Research and development (R')
ii. esign
iii. #roduction or purchases
iv. Mar!eting
v. istribution
vi. ustomer service
$. efining cost
a. ost ob*ects
b. irect costs and indirect costs
+. osts for internal decision ma!ing and e,ternal reporting (ed)
a. Total costs for internal decision ma!ing
b. "nventoriable product costs for e,ternal reporting
c. Merchandising companies- inventoriable product costs
d. Manufacturing companies- inventoriable product costs
i. irect materials (M)
ii. irect labor ()
iii. Manufacturing overhead (M/0)
1. "ndirect materials
2. "ndirect labor
$. /ther indirect manufacturing costs
e. #rime and conversion costs (%ri)
f. dditional labor compensation costs
. "nventoriable product costs and period costs shown in the financial statements
a. Service companies
b. Merchandising companies
c. Manufacturing companies
i. alculating the cost of goods manufactured and cost of goods sold
d. omparing balance sheets of the three types of organi3ations
4. /ther cost terms used by managers (ed)
a. ontrollable versus uncontrollable costs
b. Relevant and irrelevant costs
i. ifferential cost
ii. Sun! cost
c. %i,ed and variable costs
d. 0ow manufacturing costs behave
e. alculating total and average costs at different volumes
