Terms and Flows

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TERMS
FLOWS
Cost
COST Cover material in ONE DAY
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Product
Period
Variable
Fixed
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• Direct Materials
• Variable

• Direct Labor
• Variable

• Manufacturing Overhead
• Variable
• Fixed

• Examples of MOH
• Indirect Materials
• Indirect Labor

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• Absorption Costing Income Statement
• For Y/E ...
• Revenue
• Cost of Goods Sold
• Gross Margin
• Selling and Admin. Costs
• Operating Income
• Income Taxes
• Net Income (After Tax)

Product Costs
Period Costs
The two income statement formats are organized by
the four types of costs defined earlier.

• Variable Costing Income Statement
• For Y/E ...
• Revenue
• Variable Costs
• Contribution Margin
• Fixed Costs
• Operating Income
• Income Taxes
• Net Income (After Tax)

• Balance Sheet
• As of ...
• Assets
• Liabilities
• Owners Equity

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TERMS FLOWS
Cost

• Do a simple problem (VC vs. AC)
• SoMuch Stereos (COST)
• Show I/S in good form
• Do a cost flows example
• Cattle Co. 1997 (COST)
• (also show CF)
• Have students work on problem

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