Learning Objectives

1. Identify and give examples of each of the three basic cost elements involved in the manufacture of a product.
2. Distinguish between period costs and product costs and give examples of each.
3. Prepare a schedule of cost of goods manufactured in good form.
4. Explain the flow of direct materials cost, direct labour cost, and manufacturing overhead cost from the point of incurrence to sale of the completed product.
5. Identify and give examples of variable costs and fixed costs and explain the difference in their behaviour.
6. Define and give examples of direct cost and indirect costs.
7. Define and give examples of cost classifications used in making decisions - differential costs, opportunity costs, and sunk costs.
8. Explain what an organization is and the importance of strategic planning.
9. (Appendix 2A) Properly classify labour costs associated with idle time, overtime, and fringe benefits.