Hi Ve Broad Purposes Are: Purpose 1: Formulating Overall Strategies and Long-Range Plans. Purpose 2:

Seminar Illustration Seminar Illustration

Classification of costs Cl ifi i f

Refer to handout Cost item A. Annual retainer paid to a film distributor B. Electricity costs of crescendo store (single b ll covers entire store) ( l bill ) C. Costs of films purchased for sale to customers D. Leasing of computer software used for financial budgeting at crescendo store E. Cost of popcorn provided free to all customers F. F Earthquake insurance policy for crescendo store G. Freight in costs of movies purchased by crescendo H. Subscription to Video‐Novo magazine D or I I I D I I I D D V or F F V V F V F V F

Schedule of cost of goods manufactured for the year ended 31 December 2011 (in $mil.)

$ Direct materials used  Direct materials used 13.05 13 05 Direct manufacturing labour costs                                                                                5.10 Indirect manufacturing costs: Property tax on plant building  Property tax on plant building 0.45 0 45 Plant utilities  2.55 Depreciation of plant building  1.35 Depreciation of plant equipment  Depreciation of plant equipment 1.65 Plant repairs and maintenance  2.40 Indirect manufacturing labour costs  3.45 Indirect materials used  1.65 Miscellaneous plant overhead  0.60        14.10 Manufacturing costs incurred during 2011 32.25 Add opening work in progress stock, 1 Jan. 2011        3.00 Total manufacturing costs to account for  35.25 Deduct closing work in progress stock, 31 Dec. 2011 3.90 Cost of goods manufactured  31.35 $

Schedule of cost of goods sold for the year ended 31 December 2011 (in $mil.)

Opening finished goods, 1 Jan. 2011  Cost of goods manufactured (above)  Cost of goods manufactured (above) Cost of goods available for sale  Closing finished goods, 31 Dec. 2011  Cost of goods sold  g

4.05 31.35 35.40 5.10 30.30

Quiz  Quiz

1. Cost objects include

a. b. c. c d. Products Customers Departments All of the above

Quiz

2. Classifying a cost as either direct or indirect  l if i i h di i di...