The costs incurred in a production process as a result of which raw material is converted into finished goods. The conversion costs usually include direct labor and manufacturing overheads but exclude the costs of direct material itself.
The Cost of Goods Manufactured (COGM) represents the total production cost of finished goods transferred from a production facility to inventory over an accounting period.
The direct cost of sales, also known as the prime cost, refers to the aggregate expenses directly tied to the production of a good or service, encompassing direct materials, direct labor, and direct expenses, while excluding overhead costs.
Product costs that can be directly traced to a product or cost unit. They encompass direct materials, direct labor, and direct expenses that are attributable to the product without the need for cost apportionment.
A direct hour is the time spent working directly on a product, service, or cost unit within an organization. It is measured in direct labor hours, machine hours, or standard hours.
Direct labor refers to the cost of personnel that can be directly identified in the production of a product, such as the salary of workers operating machines on a production line but not including administrative or janitorial staff.
An operator in an organization whose time is spent working on the product or cost unit to such an extent that the operator's time is traceable to the product as a direct cost.
Factory costs, also known as factory expenses, are expenditures incurred by the manufacturing section of an organization. This includes direct materials, direct labor, direct expenses, and manufacturing overheads. It excludes markup or profit.
The cost to a manufacturing company of making a product, consisting of direct materials, direct labor, and factory overhead; also called manufacturing expense.
The manufacturing cost of finished goods refers to the total expense incurred to produce a finished product. This includes the direct materials, direct labor, and manufacturing overhead costs associated with the production process.
Understand in detail the various expenses incurred during the manufacturing process, including direct materials, direct labor, direct expenses, and manufacturing overhead.
A comprehensive report detailing the cost of production in a manufacturing firm, prepared to assess the financial performance of the company's production activities.
In standard costing, a performance standard refers to the predetermined level of performance to be achieved during a specific period, which is used to calculate standard costs for processes, typically direct labor and materials.
Prime cost is a crucial accounting term reflecting the direct costs of production, typically including direct materials and direct labor expenses.
A basis used in absorption costing for absorbing manufacturing overhead into the cost units produced. It is essential for allocating overhead costs accurately in a manufacturing environment.
In standard costing, the standard direct labour cost is derived from the standard time allowed for the performance of an operation and the standard direct labor rate for the operators specified for that operation.
In cost accounting, unit-level activities are those that are performed each time a unit is produced. These include tasks directly correlated with the production volume, such as machine operation and direct labor.
