2a. Explain the differences between a period cost and a product cost.
• Period cost are the ones which are attached to the revenue over a given period, therefore, is not included as an integral part of inventories, this cost are caused by everything that additionally is made in order to sell the items manufactured.
• A product costs incorporated the value of manufactured products, right through the asset accounts. Some costs are more attached to products than time, and keeps attached until the sale occurs. At the time of sale, these costs are removed from the inventory and joined to the revenue for the period.
2b. Describe and explain the Cost of Goods Gold statement for a retailing company.
• The cost of goods sold depends on the cost that …show more content…
Job Order Costing System. Provide three examples of companies that may use this cost accumulation system.
• A Job Order Costing System collects and records the costs to specific work-by-work orders, which may consist of a single physics or some equal units forming a batch or a particular work unit. The three elements of cost (direct materials, direct labor and manufacturing overhead costs) build a product according to its identification with work orders.
• Manufacturing Companies, Retail Companies, Medical Services Companies.
3b. Process Costing. Give three examples of companies that may use this cost accumulation system.
• It is used in industries where the final products are more or less identical. With this system, no attempt is made to allocate the cost of manufacturing a specific order, instead, the cost of an individual order for each unit can be obtained by dividing the production costs for a particular period by the number of units produced for that period. In other words the cost of the order is presumed to be the average cost of all units produced during the period.
• Oil refining, food production, and chemical processing.
4a. Direct …show more content…
Although sales expenses, general and administration are also frequently seen as indirect costs, are not part of the indirect manufacturing costs or the product costs.
5a. Define Manufacturing overhead cost:
• Includes all costs directly related to the manufacturing process of a company or factory costs
5b. Define The Traditional Overhead Cost Allocation System
• It is use to allocate overhead to manufacturing units produced. Under the traditional system of cost accountants allocates manufacturing costs only to the products. Traditional accounting can not assign non-manufacturing costs that are also associated with the production of an article, such as expenses 5c. Define the Activity Based Costing System (ABC)
• The Activity Based Costing is a costing method of dual phase, which allocates costs first to activities and then to products based on the use of activities for each product. An activity is any discrete task that an organization undertakes to make or deliver a product or service. The Activity Based Costing is based on the concept that products consume activities and activities consume resources.
6. Inventory types found and used in the Production/ Manufacturing
• Period cost are the ones which are attached to the revenue over a given period, therefore, is not included as an integral part of inventories, this cost are caused by everything that additionally is made in order to sell the items manufactured.
• A product costs incorporated the value of manufactured products, right through the asset accounts. Some costs are more attached to products than time, and keeps attached until the sale occurs. At the time of sale, these costs are removed from the inventory and joined to the revenue for the period.
2b. Describe and explain the Cost of Goods Gold statement for a retailing company.
• The cost of goods sold depends on the cost that …show more content…
Job Order Costing System. Provide three examples of companies that may use this cost accumulation system.
• A Job Order Costing System collects and records the costs to specific work-by-work orders, which may consist of a single physics or some equal units forming a batch or a particular work unit. The three elements of cost (direct materials, direct labor and manufacturing overhead costs) build a product according to its identification with work orders.
• Manufacturing Companies, Retail Companies, Medical Services Companies.
3b. Process Costing. Give three examples of companies that may use this cost accumulation system.
• It is used in industries where the final products are more or less identical. With this system, no attempt is made to allocate the cost of manufacturing a specific order, instead, the cost of an individual order for each unit can be obtained by dividing the production costs for a particular period by the number of units produced for that period. In other words the cost of the order is presumed to be the average cost of all units produced during the period.
• Oil refining, food production, and chemical processing.
4a. Direct …show more content…
Although sales expenses, general and administration are also frequently seen as indirect costs, are not part of the indirect manufacturing costs or the product costs.
5a. Define Manufacturing overhead cost:
• Includes all costs directly related to the manufacturing process of a company or factory costs
5b. Define The Traditional Overhead Cost Allocation System
• It is use to allocate overhead to manufacturing units produced. Under the traditional system of cost accountants allocates manufacturing costs only to the products. Traditional accounting can not assign non-manufacturing costs that are also associated with the production of an article, such as expenses 5c. Define the Activity Based Costing System (ABC)
• The Activity Based Costing is a costing method of dual phase, which allocates costs first to activities and then to products based on the use of activities for each product. An activity is any discrete task that an organization undertakes to make or deliver a product or service. The Activity Based Costing is based on the concept that products consume activities and activities consume resources.
6. Inventory types found and used in the Production/ Manufacturing