MANUFACTURING PHISICAL

FLOWS
Material

Labor
Finished
Goods

Overhead

Costing
Cost Object

Direct Cost

Direct
Material
Cost

Direct
Labor Cost

Product

Indirect Cost
Factory Overhead
Cost

Allocation

MANUFACTURING COST FLOWS

Material

Direct
Material
Indirect
Material
Overhead
Indirect
Labor

Work in
Process
(WIP)
Direct
Labor

Finished
Goods
Cost of
Goods
Sold

Labor
3

MANUFACTURING COST FLOWS

MATERIAL Inv
XX

XX

WIP

XX

XX

F O H Control
XX
XX
XX

XX

FINISH
Goods Inv
XX

XX
XX

XX

Cost
of GS
Rate

F O H Applied
LABOR COST
XX

XX

XX

XX
XX

Relationship of Cost Accumulation, Cost

Measurement, and Cost Assignment
Cost
Accumulation
Record Costs:
Purchase materials

Cost
Measurement
Classify Costs:
Direct Materials

Assemblers payroll
Finishers payroll

Cost
Assignment
Assign to Cost Objects:
Product 1

Direct Labor

Supervisors Payroll
Depreciation
Utilities
Property taxes

Product 2
Overhead

Landscaping
5

Factory Overhead (FOH)

Indirect Material Cost
Indirect Labor Cost
Plant Depreciation
Utilities
Etc

Assigning FOH to Product

Actual Costing

Normal Costing
FOH Rate