Managerial and Cost Accounting concepts: Here we will start to distinguish between Financial Accounting and Managerial Accounting. We will begin to look at manufacturing costs since they lend themselves very well to the new concepts. In Chapter 10 we will also start to classify the costs of a business as direct material, direct labor or manufacturing overhead or period costs.

Discussion Topic: Assume you have just taken a position as controller for a new company that manufactures and sells wrought iron wall hangings. Although the founder of the company, who is the president and CEO, is a great artisan, she has very limited knowledge of accounting. Instructions To help your new boss better understand accounting for a manufacturing organization, prepare a response to her in which you:

(1) Identify each of the three manufacturing costs,

(2) Describe/define each of the three manufacturing costs, and

(3) Provide at least one example of each of the three manufacturing costs that might be used in the company you were just hired to work for.