Grade 11 Accounting Manufacturing Notes for revision:
What is Cost Accounting?
Cost Accounting is often referred to as Manufacturing Accounting, as it deals with a systematic set of procedures for recording and reporting measurements of the cost of manufacturing goods and performing services in the aggregate and in detail.
Important Items in Cost Accounting for Grade 11
Direct labour: is the labour that is practically involved in the production process of the product. Direct labour is the amount of effort exerted by employees to convert raw material into finished goods.
Direct materials: are those materials that are consumed during the manufacturing process of the product and which are directly identified in the product. It is the material that are made into finished product. It is physically become the finished product at the end of the manufacturing process.
Indirect material: is the material that in the production process that cannot be traced in the finished product. This material while consumed as part of the production process, is usually used in small amount on a per-product basis. It cannot be conveniently identified and allocated to the cost unit.
Indirect labour :is the labour that supports the production process but which is not directly involved in the active conversion of materials into finished products.
