Academic Wiki

Management functions:

• Planning: Requires management to look ahead and establish objectives such as maximizing profits, market share, and contributing to social programs.

• Directing: Coordinating a company’s activities to produce a smooth running operation.

• Controlling: Keeping the company’s activities on course.

Manufacturing costs:

• Direct materials: Generally refers to the raw materials used in the direct manufacture of a product.  This is generally the biggest percentage of costs in a finished product.

• Indirect materials: Material costs that do not directly become part of the finished product.  These costs become manufacturing overhead.

• Direct labor: Work that can be directly associated with finished goods.  The smallest contributor to costs.

• Indirect labor: Labor that did not directly contribute to the final product.  Examples include maintenance workers, supervisors, etc.  These costs are lumped into manufacturing overhead.

• Manufacturing overhead: All other costs that are indirectly associated with the production of a product.

·        Period costs