Final answer:
Sections of the schedule of cost of goods manufactured include direct materials, direct labor, and manufacturing overhead, derived from the production function and factor payments. Additional factors like tariffs and value chain also influence the COGM.
Step-by-step explanation:
The sections of the schedule of cost of goods manufactured (COGM) are vital to understanding the aggregate costs involved in the process of producing goods. Value chain analysis and factors such as tariffs are external influences that can affect the COGM. The COGM itself is primarily derived from internal company factors, including direct materials, direct labor, and manufacturing overhead. In essence, the costs originate from the production function and the associated payments for factors of production. To elucidate these concepts, let's borrow the characteristics described in the Production, Costs and Industry Structure chapter. This information mentions the role of a production function, similar to the one outlined for 'widgets' instead of trees, which demonstrates how variances in inputs, like workers (L), affect outputs, such as widgets (Q).
Considering the production function, we see that as more workers are employed, the number of widgets produced changes. This variation in production can be graphed, showing the relationship between input quantities and output quantities which is a fundamental component of the cost structure in manufacturing. Therefore, the production function and factor payments often determine the cost figures within the COGM. In the short run, these cost calculations are based on the assumed production function and involve a detailed breakdown of the variables affecting cost, such as direct labor, materials, and overhead. Knowledge of these figures is essential for businesses to manage their manufacturing processes efficiently and optimize profitability while considering potential external factors such as tariffs imposed on imported goods, which influence the total cost of production.