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Direct Materials Cost
Direct materials cost the cost of direct materials which can be easily identified with the unit of production. For example, the cost of glass is a direct materials cost in light bulb manufacturing. The manufacture of products or goods required material as the prime element. In general, these materials are divided into two categories. These categories are direct materials and indirect materials. Direct materials are also called productive materials, raw materials, raw stock, stores and only materials without any descriptive title. Direct materials cost estimation Steps to estimate the direct material costs:Phillip W. Gillet, Jr., J.D. notes, Chapter three #Find the total amount to be produced. This is usually noted as the order size. #Calculate the total amount of raw materials required to produce the order size. #Multiply that amount by the cost associated with the raw materials. #If there is a waste or scrap, its cost should be added to the costs in step 3. #If the waste or ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Estimation
Estimation (or estimating) is the process of finding an estimate or approximation, which is a value that is usable for some purpose even if input data may be incomplete, uncertain, or unstable. The value is nonetheless usable because it is derived from the best information available.C. Lon Enloe, Elizabeth Garnett, Jonathan Miles, ''Physical Science: What the Technology Professional Needs to Know'' (2000), p. 47. Typically, estimation involves "using the value of a statistic derived from a sample to estimate the value of a corresponding population parameter".Raymond A. Kent, "Estimation", ''Data Construction and Data Analysis for Survey Research'' (2001), p. 157. The sample provides information that can be projected, through various formal or informal processes, to determine a range most likely to describe the missing information. An estimate that turns out to be incorrect will be an overestimate if the estimate exceeds the actual result and an underestimate if the estimate fal ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Waste
Waste (or wastes) are unwanted or unusable materials. Waste is any substance discarded after primary use, or is worthless, defective and of no use. A by-product, by contrast is a joint product of relatively minor economic value. A waste product may become a by-product, joint product or resource through an invention that raises a waste product's value above zero. Examples include municipal solid waste (household trash/refuse), hazardous waste, wastewater (such as sewage, which contains bodily wastes ( feces and urine) and surface runoff), radioactive waste, and others. Definitions What constitutes waste depends on the eye of the beholder; one person's waste can be a resource for another person. Though waste is a physical object, its generation is a physical and psychological process. The definitions used by various agencies are as below. United Nations Environment Program According to the Basel Convention on the Control of Transboundary Movements of Hazardous Waste ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Scrap
Scrap consists of recyclable materials, usually metals, left over from product manufacturing and consumption, such as parts of vehicles, building supplies, and surplus materials. Unlike waste, scrap has monetary value, especially recovered metals, and non-metallic materials are also recovered for recycling. Once collected, the materials are sorted into types — typically metal scrap will be crushed, shredded, and sorted using mechanical processes. Scrap recycling is important for creating a more sustainable economy or creating a circular economy, using significantly less energy and having far less environmental impact than producing metal from ore. Metal recycling, especially of structural steel, ships, used manufactured goods, such as vehicles and white goods, is a major industrial activity with complex networks of wrecking yards, sorting facilities and recycling plants. Processing Scrap metal originates both in business and residential environments. Typically a "scrapp ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Salvage Value
''Residual value'' is one of the constituents of a leasing calculus or operation. It describes the future value of a good in terms of absolute value in monetary terms and it is sometimes abbreviated into a percentage of the initial price when the item was new. Example: A car is sold at a list price of $20,000 today. After a usage of 36 months and 50,000 miles its value is contractually defined as $10,000 or 50%. The credited amount, on which the interest is applied, thus is $20,000 present value minus the present value of $10,000 future value. Residual values are contractually dealt with either in terms of closed contracts or open contracts. In accounting, residual value is another name for salvage value, the remaining value of an asset after it has been fully depreciated, or after deteriorating beyond further use. The residual value derives its calculation from a base price, calculated after depreciation In accountancy, depreciation is a term that refers to two aspects ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Variance Analysis (accounting)
In budgeting (or management accounting in general), a variance is the difference between a budgeted, planned, or standard cost and the actual amount incurred/sold. Variances can be computed for both costs and revenues. The concept of variance is intrinsically connected with planned and actual results and effects of the difference between those two on the performance of the entity or company. Types of variances Variances can be divided according to their effect or nature of the underlying amounts. When effect of variance is concerned, there are two types of variances: * When actual results are better than expected results given variance is described as favorable variance. In common use favorable variance is denoted by the letter F - usually in parentheses (F). * When actual results are worse than expected results given variance is described as adverse variance, or unfavourable variance. In common use adverse variance is denoted by the letter U or the letter A - usually in parent ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Direct Material Total Variance
In variance analysis (accounting) direct material total variance is the difference between the actual cost of actual number of units produced and its budgeted cost in terms of material. Direct material total variance can be divided into two components: *the direct material price variance, *the direct material usage variance. Example Let us assume that standard direct material cost of widget is as follows: :2 kg of unobtainium at $ 60 per kg ( = $ 120 per unit). Let us assume further that during the given period, 100 widgets were manufactured, using 212 kg of unobtainium which cost $ 13,144. Under those assumptions direct material total variance can be calculated as: Direct material total variance can be reconciled to direct material price variance and direct material usage variance by: See direct material usage variance#Example and direct material price variance#Example for computations of both components. See also *Variance analysis (accounting) In budgeting ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Direct Material Price Variance
In variance analysis (accounting) direct material price variance is the difference between the standard cost and the actual cost for the actual quantity of material purchased. It is one of the two components (the other is direct material usage variance) of direct material total variance. Example Let us assume that the standard direct material cost of widget is as follows: :2 kg of unobtainium at € 60 per kg ( = € 120 per unit). Let us assume further that during the given period, 100 widgets were manufactured, using 212 kg of unobtainium which cost € 13,144. Under those assumptions direct material price variance can be calculated as: Direct material price variance is because Todd pays too much for steel can be reconciled to direct material total variance by way of direct material usage variance: spending variance seen as per product cost (212*62)-(200*60) See direct material total variance#Example and direct material usage variance#Example for computations of bo ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Direct Material Usage Variance
In variance analysis, direct material usage (efficiency, quantity) variance is the difference between the standard quantity of materials that should have been used for the number of units actually produced, and the actual quantity of materials used, valued at the standard cost per unit of material. It is one of the two components (the other is direct material price variance) of direct material total variance. Example Let us assume that standard direct material cost of widget is as follows: :2 kg of unobtainium at € 60 per kg ( = € 120 per unit). Let us assume further that during given period, 100 widgets were manufactured, using 212 kg of unobtainium which cost € 13,144. Under those assumptions direct material usage variance can be calculated as: Direct material usage variance can be reconciled to direct material total variance by way of direct material price variance: See direct material total variance#Example and direct material price variance#Example for computa ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
