ACCY 202 1st Edition Discussion Lecture 10Outline of Last 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)Outline of Current LectureI. Process Costing System1. ExampleII. Job Cost Record1. Direct Material2. Direct Labor3. Manufacturing OverheadIII. Page 1501. Direct or Indirect?IV. Shop CleanupV. Things to Remember1. WIP = DirectA. Raw Materialsi. Production Materials Traceable to Specific Jobsii. Production Materials Not Traceable to Specific Jobsiii. Non-Factory Items2. MOH = IndirectThese 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.Current LectureI. Process Costing System1. Example: M&M’s, pens etc…- Thousands and thousands of them being produced at a time. Mass production!- Another example is gallons of milk that are produced in a factory. There is nodistinguishable factor to them, just made to all look alike.II. Job Cost Record- Tracking the job travelling around the floor1. Direct Material- Goes under Work in Progress (WIP)2. Direct Labor- A factor is time3. Manufacturing Overhead- Always indirectIII. Page 150 answer1. Direct or Indirect?- Paint charges are a direct material because he paint helps to get the actual job done in productionIV. Shop Cleanup - Also known as factory cleanup which is the process of clearing unnecessary things out of the factory and setting up for a new set of raw materialsV. Things to Remember1. WIP is always direct laborA. Raw materials in WIP consist of company resources such as:i. Production Materials Traceable to specific jobsii. Production Materials Not Traceable to Specific jobsiii. Non-Factory Items2. MOH is always Indirect