Product costs are the cost of Direct Material, Direct Labour and Manufacturing Overheads used in making the product. Period costs are usually associated with the selling function of the business or its general administration. Period costs are reported in the accounting period in which they best match with revenues, when they expire or in the current accounting period. Interest expenses are also in the nature of period expense. To state: Whether the costs are either Product or Period cost

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Answer 1

Question

Chapter 18, Problem 2APSA

Requirement 1.

To determine

Introduction:

Product costs are the cost of Direct Material, Direct Labour and Manufacturing Overheads used in making the product.

Period costs are usually associated with the selling function of the business or its general administration. Period costs are reported in the accounting period in which they best match with revenues, when they expire or in the current accounting period. Interest expenses are also in the nature of period expense.

To state:

Whether the costs are either Product or Period cost

Requirement 2.

To determine

Introduction:

Direct Material is the cost which can be easily traceable to a product. It is an integral part of the finished product and often referred to as Raw material.

Direct Labor can be physically and conveniently traced to a unit of finished product. This is the cost of people who make the product.

Factory Overheads include all other indirect cost required to make a product. Usually, manufacturing Overheads cannot be easily traced to individual units of finished product.

To state:

Whether the product costs are Direct Material, Direct Labor or Factory Overheads

Requirement 3.

To determine

Introduction:

Selling expenses are those which are associated with selling the product. It includes the cost of sales personnel, sales commissions, marketing, advertising and distribution of product.

General and administrative expenses relate to the costs of general operations of the company. It includes cost of executive salaries and offices, human resource department, research and development of new product and cost of maintaining the company.

To state:

Whether the period costs are selling or general or administrative expenses

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4. ABG produces and sells a single product at the price of 20 euros. During its first year of operation (20X7), the company had no initial stocks. The production cost of a product unit is as follows: Variable production cost of 8 euros per unit. Fixed production cost 9,600 euros. Also, the company has fixed sales expenses of 5,400 euros. In the first year of operation, the company had budgeted that it would produce and sell 3,200 units of product. In fact, during the period production and sales amounted to 3,200 units of product. Requested: To calculate the operating result of the company for the first year of its operation using absorption and marginal costing. Calculate the operating result of the company for the first year of its operation using absorption and marginal costing, assuming that sales for the period amounted to 2,700 units and 500 units remained as final inventory. What is the value of the final inventory of stocks with both costing techniques in this case?

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Answer 2

Question

Chapter 18, Problem 2APSA

Requirement 1.

To determine

Introduction:

Product costs are the cost of Direct Material, Direct Labour and Manufacturing Overheads used in making the product.

Period costs are usually associated with the selling function of the business or its general administration. Period costs are reported in the accounting period in which they best match with revenues, when they expire or in the current accounting period. Interest expenses are also in the nature of period expense.

To state:

Whether the costs are either Product or Period cost

Requirement 2.

To determine

Introduction:

Direct Material is the cost which can be easily traceable to a product. It is an integral part of the finished product and often referred to as Raw material.

Direct Labor can be physically and conveniently traced to a unit of finished product. This is the cost of people who make the product.

Factory Overheads include all other indirect cost required to make a product. Usually, manufacturing Overheads cannot be easily traced to individual units of finished product.

To state:

Whether the product costs are Direct Material, Direct Labor or Factory Overheads

Requirement 3.

To determine

Introduction:

Selling expenses are those which are associated with selling the product. It includes the cost of sales personnel, sales commissions, marketing, advertising and distribution of product.

General and administrative expenses relate to the costs of general operations of the company. It includes cost of executive salaries and offices, human resource department, research and development of new product and cost of maintaining the company.

To state:

Whether the period costs are selling or general or administrative expenses

Expert Solution & Answer

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Answer 3

Question

Chapter 18, Problem 2APSA

Requirement 1.

To determine

Introduction:

Product costs are the cost of Direct Material, Direct Labour and Manufacturing Overheads used in making the product.

Period costs are usually associated with the selling function of the business or its general administration. Period costs are reported in the accounting period in which they best match with revenues, when they expire or in the current accounting period. Interest expenses are also in the nature of period expense.

To state:

Whether the costs are either Product or Period cost

Requirement 2.

To determine

Introduction:

Direct Material is the cost which can be easily traceable to a product. It is an integral part of the finished product and often referred to as Raw material.

Direct Labor can be physically and conveniently traced to a unit of finished product. This is the cost of people who make the product.

Factory Overheads include all other indirect cost required to make a product. Usually, manufacturing Overheads cannot be easily traced to individual units of finished product.

To state:

Whether the product costs are Direct Material, Direct Labor or Factory Overheads

Requirement 3.

To determine

Introduction:

Selling expenses are those which are associated with selling the product. It includes the cost of sales personnel, sales commissions, marketing, advertising and distribution of product.

General and administrative expenses relate to the costs of general operations of the company. It includes cost of executive salaries and offices, human resource department, research and development of new product and cost of maintaining the company.

To state:

Whether the period costs are selling or general or administrative expenses

Expert Solution & Answer

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See solution

Answer 4

Question

Chapter 18, Problem 2APSA

Requirement 1.

To determine

Introduction:

Product costs are the cost of Direct Material, Direct Labour and Manufacturing Overheads used in making the product.

Period costs are usually associated with the selling function of the business or its general administration. Period costs are reported in the accounting period in which they best match with revenues, when they expire or in the current accounting period. Interest expenses are also in the nature of period expense.

To state:

Whether the costs are either Product or Period cost

Requirement 2.

To determine

Introduction:

Direct Material is the cost which can be easily traceable to a product. It is an integral part of the finished product and often referred to as Raw material.

Direct Labor can be physically and conveniently traced to a unit of finished product. This is the cost of people who make the product.

Factory Overheads include all other indirect cost required to make a product. Usually, manufacturing Overheads cannot be easily traced to individual units of finished product.

To state:

Whether the product costs are Direct Material, Direct Labor or Factory Overheads

Requirement 3.

To determine

Introduction:

Selling expenses are those which are associated with selling the product. It includes the cost of sales personnel, sales commissions, marketing, advertising and distribution of product.

General and administrative expenses relate to the costs of general operations of the company. It includes cost of executive salaries and offices, human resource department, research and development of new product and cost of maintaining the company.

To state:

Whether the period costs are selling or general or administrative expenses

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 5

Chapter 18, Problem 2APSA

Requirement 1.

To determine

Introduction:

Product costs are the cost of Direct Material, Direct Labour and Manufacturing Overheads used in making the product.

Period costs are usually associated with the selling function of the business or its general administration. Period costs are reported in the accounting period in which they best match with revenues, when they expire or in the current accounting period. Interest expenses are also in the nature of period expense.

To state:

Whether the costs are either Product or Period cost

Requirement 2.

To determine

Introduction:

Direct Material is the cost which can be easily traceable to a product. It is an integral part of the finished product and often referred to as Raw material.

Direct Labor can be physically and conveniently traced to a unit of finished product. This is the cost of people who make the product.

Factory Overheads include all other indirect cost required to make a product. Usually, manufacturing Overheads cannot be easily traced to individual units of finished product.

To state:

Whether the product costs are Direct Material, Direct Labor or Factory Overheads

Requirement 3.

To determine

Introduction:

Selling expenses are those which are associated with selling the product. It includes the cost of sales personnel, sales commissions, marketing, advertising and distribution of product.

General and administrative expenses relate to the costs of general operations of the company. It includes cost of executive salaries and offices, human resource department, research and development of new product and cost of maintaining the company.

To state:

Whether the period costs are selling or general or administrative expenses

Answer 6

Chapter 18, Problem 2APSA

Requirement 1.

To determine

Introduction:

Product costs are the cost of Direct Material, Direct Labour and Manufacturing Overheads used in making the product.

Period costs are usually associated with the selling function of the business or its general administration. Period costs are reported in the accounting period in which they best match with revenues, when they expire or in the current accounting period. Interest expenses are also in the nature of period expense.

To state:

Whether the costs are either Product or Period cost

Answer 7

Chapter 18, Problem 2APSA

Requirement 1.

To determine

Introduction:

Product costs are the cost of Direct Material, Direct Labour and Manufacturing Overheads used in making the product.

Period costs are usually associated with the selling function of the business or its general administration. Period costs are reported in the accounting period in which they best match with revenues, when they expire or in the current accounting period. Interest expenses are also in the nature of period expense.

To state:

Whether the costs are either Product or Period cost

Answer 8

Requirement 2.

To determine

Introduction:

Direct Material is the cost which can be easily traceable to a product. It is an integral part of the finished product and often referred to as Raw material.

Direct Labor can be physically and conveniently traced to a unit of finished product. This is the cost of people who make the product.

Factory Overheads include all other indirect cost required to make a product. Usually, manufacturing Overheads cannot be easily traced to individual units of finished product.

To state:

Whether the product costs are Direct Material, Direct Labor or Factory Overheads

Answer 9

Requirement 2.

To determine

Introduction:

Direct Material is the cost which can be easily traceable to a product. It is an integral part of the finished product and often referred to as Raw material.

Direct Labor can be physically and conveniently traced to a unit of finished product. This is the cost of people who make the product.

Factory Overheads include all other indirect cost required to make a product. Usually, manufacturing Overheads cannot be easily traced to individual units of finished product.

To state:

Whether the product costs are Direct Material, Direct Labor or Factory Overheads

Answer 10

Requirement 3.

To determine

Introduction:

Selling expenses are those which are associated with selling the product. It includes the cost of sales personnel, sales commissions, marketing, advertising and distribution of product.

General and administrative expenses relate to the costs of general operations of the company. It includes cost of executive salaries and offices, human resource department, research and development of new product and cost of maintaining the company.

To state:

Whether the period costs are selling or general or administrative expenses

Answer 11

Requirement 3.

To determine

Introduction:

Selling expenses are those which are associated with selling the product. It includes the cost of sales personnel, sales commissions, marketing, advertising and distribution of product.

General and administrative expenses relate to the costs of general operations of the company. It includes cost of executive salaries and offices, human resource department, research and development of new product and cost of maintaining the company.

To state:

Whether the period costs are selling or general or administrative expenses

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 18 - Prob. 1DQ Ch. 18 - Prob. 2DQ Ch. 18 - Prob. 3DQ Ch. 18 - Prob. 4DQ Ch. 18 - Prob. 5DQ Ch. 18 - Prob. 6DQ Ch. 18 - Prob. 7DQ Ch. 18 - Prob. 8DQ Ch. 18 - Prob. 9DQ Ch. 18 - Prob. 10DQ

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