chapter 2 - cost management acc

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Chapter 2 - seminar question cost term, concepts and classifications and solutions to questions

2.1) The three major elements of product costs are manufacturing overhead, direct labour and direct material

2.2) Direct materials - materials that are an integral part of the product and that can be traced directly to it. For example a radio installed in a car

Indirect materials - materials used to support the production in process. materials that can't be traced directly on the product or example cleaning materials used to clean the car

Direct Labour - labour costs that can be easily traced to individual units of products. for example salaries and wages

Indirect labour - salaries and wages not employed directly by authority (mentainance)

manufacturing overhead