Cost Terms Flashcards
1
Q
Direct Material
A
Integral part of product & is easily returned to product
2
Q
Example
Direct Material
A
Raw Material
3
Q
Indirect material
A
Used to support production process
4
Q
Direct Labour
A
Easily traced back to individual units of product
5
Q
Example
Direct Labour
A
Salary of factory employee
6
Q
Indirect Labour
A
Wages paid to employees NOT directly involved in production
7
Q
Example
Indirect Labour
A
Salary of factory supervisor
8
Q
Period cost
A
Not included in Product Cost
Written off in Income Statement
9
Q
Product Cost
A
Includes Direct Material, Direct Labour & Manufacturing Overhaeds
10
Q
Fixed Cost
A
Remain unchanged when activity changes
11
Q
Examples
Fixed Cost
A
- Monhtly rent
- Advertisement
- Depreciation
12
Q
Variable Cost
A
Changes when activity changes
13
Q
Examples
Variable cost
A
- Total material cost
- Salary & Wages
- Water & Electricity
14
Q
Direct Cost
A
Easily & conveniently routed to unit of product
15
Q
Examples
Direct Cost
A
- Direct Material
- Direct Labour
