Beginning Merchandise Inventory $11,20,000 Sales commission $ 5,850 Direct wage $ 1, 00,000 Other direct Expenses $1000 Factory Rent $ 11,000 Factory Building depreciation $ 20,000 Office managers salary $ 18,000 Advertising $ 5,900 Sales discount $2,500 Sales [?] Closing Merchandise Inventory $1,15,000 Merchandise purchased $ 2, 10,000 Purchase returns $ 15,000 Purchase allowance $5,000 Freight in $ 11,000 Freight out $15.000

Q: Distinguish between Period cost and Product cost? Give two examples of each cos

A: Classification of costs on the basis of functions:- 1. Product Cost 2. Period Cost

Q: Define the term transportation costs.

A: Cost: Cost is that amount which is paid to get something from the any supplier and the amount which…

Q: ustomizing cost

A: Cost accounting is one of the accounting system that is used by the businesses. The main purpose of…

Q: Define relevant cost.

A: Relevant cost is a cost which can be changed with change in selection of a alternative decision.…

Q: real life example of Absorption costing and traditional costing

A: Absorption costing is a managerial accounting method in which we capture all costs that is…

Q: Define period costs.

A: Period costs are not joined to items and the company does not need for Offer on Sale of items and…

Q: Define the term Cost approaches.

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: Describe the concept of the INITIAL DIRECT COSTS?

A: Definition:   Initial direct costs: Initial direct costs refer to the costs that a lessor incurs…

Q: What does period cost include

A: Period costs are the expenses which are typically related to passage of time and not to any…

Q: Define the term classification of costs.

A: Classification of cost is the process of grouping of costs according to same characteristic. So,…

Q: Adoption of Activity based costing?

A: Introduction:- In this context, the question is asking about the factors that influence the adoption…

Q: Define the term cost per service.

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: Describe the difference between prime costs and conversion costs?

A: Solution:-  Difference between prime costs and conversion costs as follows under:-

Q: What does indirect cost includes?

A: Indirect costs: The costs, which do not relate directly with the manufacturing of products, are…

Q: Define sunk cost

A: Companies when making crucial decisions about their operations consider relevant costs i.e. costs…

Q: Define target full product cost.

A: Target full product cost:    Target cost is the maximum cost of a product that can be incurred and…

Process Costing

Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.  

Job Costing

Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.

ABC Costing

Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.