Basic Manufacturing Cost Categories

are costs that have already been incurred and cannot be changed by any decision made

Trade-offs are often seen within the three types of costs listed above. Sometimes we must choose to spend our budget more heavily on appraisal costs so that we can try to

when overhead is underapplied a must be made to the manufacturing overhead account to close it out

A sunk cost is any cost that was expended in the past but can be recovered if the firm decides not to go forward with the

Machine hours, direct labor hours, and direct labor costs can all be used to allocate manufacturing overhead.

1. A cost is not relevant if it: A. B. C. D. E. Does not differ for each option available to the decision maker. Changes from period to period. Is a future cost. Is a mixed cost. Is a fixed cost.

unit, two types of costs are distinguished. Firstly the direct costs, consisting of the direct

All the costs by a company can be broken into two categories, fixed costs and variable costs. Costs that are independent of output are called fixed costs. Fixed costs remain constant throughout the relevant range and are usually considered sunk for the relevant range. Buildings and machinery are included inputs that cannot be adjusted in the short term. They are only fixed in relation to the quantity of production for a certain time period. The cost of all inputs is variable, in the long run.

Emma plans a dinner party for Mrs. Elton, which Harriet does not attend because she does not like Mrs. Elton. In Harriet’s place, Emma invites Jane to attend the party. For much of the chapter, the letters Jane is receiving are a main topic of diccussion. The guests at the party are taken aback by the fact that Jane went out to receive her letters in the rain. Mr. Knightley even makes a comment towards Jane about how letters are never worth going out into the rain for, which Jane completely disagrees with.

Saturn Saturn is the sixth planet away from the sun and it is the second biggest planet after Jupiter. Saturn was named after the Roman god of farming. He was called Cronus by the Greeks. He is the son of Uranus and the father of Jupiter. Saturn overthrew his father to become king of the gods, but was then overthrown himself by his son Jupiter.

Property taxes and insurance premiums paid on a factory building are examples of manufacturing overhead.

However, the term cost cannot be exactly defined. Its interpretation depends upon the following factors:

Sunk cost is the money that has been spent in the past or considered gone.

The Operating reports include those costs that are not controllable by the individual operating manager. They would be distorted by volume changes. This means that production managers are cost center managers, held accountable for all costs incurred in or allocated to their respective areas so. It would be difficult to evaluate manager’s performance when the numbers were distorted by uncontrollable factors.

A variable cost is a corporate expense that varies with production output. Variable costs are those costs that vary depending on a company's production volume; they rise as production increases and fall as production decreases (Variable Cost, n.d.); in the case study for all cost per event such