What is a Manufacturing Account? Example, Format – Explained

The manufacturing account is the cost of the product manufactured by the company. a Manufacturing account’s status affects the trading account‘s results, whether it is a profit or a loss. What is Manufacturing Account? Manufacturing account is the cost of manufacturing a product for the company. It includes a lot of factors that influence the … Read more

What are Indirect Costs – Definition Explained

Indirect costs are costs used by multiple activities, and which cannot, therefore, be assigned to specific cost objects. Examples of cost objects are products, services, geographical regions, distribution channels, and customers. Instead, indirect costs are needed to operate the business as a whole. What are Indirect Costs Indirect costs are costs that are not directly accountable … Read more

What are conversion costs?: Definition, Formula, and Example

Conversion costs are a term used in cost accounting that represents the combination of direct labor costs and manufacturing overhead costs. In other words, conversion costs are a manufacturer’s product or production costs other than the cost of a product’s direct materials. Expressed another way, conversion costs are the manufacturing or production costs necessary to convert raw materials … Read more