How to code materials and labour
Ask two things of every cost: which centre used it, and is it direct or indirect? Then code a week of materials and wages.
Task 1Coding materials4 questions
To code a cost, ask two things. Which centre used it? What type of cost is it?
Materials that end up in the product are direct materials. Materials that are used up around the work, such as sandpaper and saw blades, are indirect materials.
| Part of the code | Name | Digits |
|---|---|---|
| Centre | Cutting | 100 |
| Centre | Assembly | 200 |
| Centre | Office | 300 |
| Centre | Showroom | 400 |
| Type of cost | Direct materials | 110 |
| Type of cost | Direct labour | 120 |
| Type of cost | Indirect materials | 210 |
| Type of cost | Indirect labour | 220 |
| Type of cost | Indirect expenses | 230 |
Task 2Coding labour2 questions
Task 3Adding up a coded week4 questions