ACCY 202 1st Edition Discussion Lecture 9Outline of Last LectureI. LIFO Solution1. Page 962. LIFO SummaryII. Weighted Average Cost1. Calculation2. Merchandise InventoryIII. Specific IdentificationIV. Physical Count1. DefinitionOutline of Current LectureI. Merchandise Inventory Purchases1. Materials2. Conversion Process: Labor3. Conversion Process: OverheadII. Period vs. Product Cost1. ExamplesIII. The ProductIV. Traceable to Specific Job?1. ExamplesV. “Prime Cost”VI. “Conversion Cost”1. Manufacturing Overhead (MOH)Current LectureI. Merchandise Inventory Purchases: Finished Product Steps1. Materials- Usually raw materials purchased2. Conversion Process: Labor- Employees working directly on the purchaseThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.3. Conversion Process: Overhead- Manufacturing cost: depreciation on equipment, facility cost and cost for supportdepartmentsII. Period vs. Product Cost1. Examples- Depreciation on equipment  It depends, because you must ask, how is the product being used?- Salaries paid to security guards  It depends, because we don’t know if they are in the production factory or not- Depreciation on a truck used to deliver product to customers  Period cost- Salaries paid to production supervisors  Product costIII. The Product = Materials + Labor + Other Manufacturing CostsIV. Traceable to Specific Job (page 141)?1. Examples- Time spent working on the job?  Yes- Every other bullet point is  No, because they are all indirect labor. - Indirect job = Manufacturing OverheadV. “Prime Cost” = Direct Materials and Direct Labor- Know this for the examVI. “Conversion Cost” = Manufacturing Overhead1. Manufacturing Overhead (MOH) is a pool of indirect cost that must somehow be attached to each individual factory job- Know this for the