Good Essay On Trek Factory Tour

The Trek bicycle factory is located in Waterloo, Canada. This paper discusses the different direct and indirect costs in the Trek bicycle factory. It will first explain the direct and indirect material costs, and then the direct and indirect labor costs. In the end, the paper, will discuss some of the overhead costs this factory incurs.
The Trek Factory tour showed us some of the direct and indirect material used in the manufacturing process. Direct materials are those materials that can be attributed to manufacturing of the product. In the Trek factory tour, the direct materials that were used were the 20 feet aluminum and steel tubing. Indirect material costs are those material costs that cannot be directly accountable to the product. In the Trek bicycle factory, some of the indirect material costs would be the six different baths of chemicals, neutralizes and cleaners bath that each frame is put through to prevent corrosion and improve paint adhesion. These are indirect material costs are they cannot be directly attributed to each frame. We also saw direct and indirect labor costs. The employees that crafted each high performance frame by their own hand, can be classified as direct labor costs. The indirect labor costs in Trek factory were the people not directly involved in the manufacturing of the frames, like the supervisors that inspect the final product. The overhead costs in the manufacturing process are costs like electricity, and rent of the factory.
In conclusion, this tour showed us a real and practical example of how to attribute different costs. By attributing different costs to the product, we can know how much it costs to make one unit of that product.