Product costs are expensed on the income statement in the period incurred. True or False
Product costs are expensed on the income statement in the period incurred. True or False
Homework Answers
False :- Production cost includes direct material, direct labour, overheads are not expensed until the item is sold. At the time of sale the product cost are recorded as cost of goods sold. Until these cost are recorded as inventory accounts as on the balance sheet date.
Correct answer:- period cost are expensed on the income statement in the period incurred. Ex:- Rent, administration expenses, depreciation etc.
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Product costs are expensed on the income statement in the period
incurred. True or False
Calculator Direct labor and direct materials are Oa. period costs and expensed when incurred Ob. product...
Calculator Direct labor and direct materials are Oa. period costs and expensed when incurred Ob. product costs and expensed when incurred Oc. period costs and expensed when the goods are sold Od. product costs and expensed when the goods are sold
Inventoriable costs are expensed on the income statement: when direct materials for the product are purchased...
Inventoriable costs are expensed on the income statement: when direct materials for the product are purchased after the products are manufactured when the products are sold not at any particular time, it varies
Which of the following statements is correct? A. Product costs for a merchandiser are expensed as...
Which of the following statements is correct? A. Product costs for a merchandiser are expensed as selling, general, and administrative expensed when the related unit is sold. B. Period costs are relevant for purposes of calculating Gross Profit on the Income Statement for a both a merchandiser and a manufacturer. C. Product costs for a manufacturer are categorized as either direct material, direct labor, or manufacturing overhead costs. D. All links in the value chain applicable to a service company...
Product costs include direct materials, direct labor, and selling costs. True False Period costs are all...
Product costs include direct materials, direct labor, and selling costs. True False Period costs are all costs that are not product costs, such as office supplies. True False A cost object is any item such as products, customers, departments, regions, and so on, for which costs are measured and assigned. True False The valve chain is the set of activities that increase the value of an organization's product and services. True False Direct costs can be economically and easily traced...
Which of the following expenditures would be expensed on an income statement immediately when incurred? a)...
Which of the following expenditures would be expensed on an income statement immediately when incurred? a) capital expenditure b) cash expenditure c) revenue expenditure d) All of the above would be expensed immediately when incurred A company purchased land for $80,000. They were required to pay back taxes of $5,000 and incurred legal fees of $2,000. They also paid $250,000 to build a warehouse on the land. What is the cost of the land that would be recorded on the...
Explain why product costs are capitalized but period costs are expensed in the current accounting period....
Explain why product costs are capitalized but period costs are expensed in the current accounting period. Explain how business activities and inventories for a manufacturing company, a merchandising company, and a service company differ. Distinguish between direct labor and indirect labor. Distinguish between (a) factory overhead and (b) selling and administrative overhead. Distinguish between direct material and indirect material. What product cost is both a prime cost and a conversion cost?
33. Research and Development costs are not expensed when determining the profitability of a project or...
33. Research and Development costs are not expensed when determining the profitability of a project or shown on a projected income statement. a. True b. False
Distinguish between inventoriable costs and period costs. O A. Inventoriable costs include direct manufacturing materials and...
Distinguish between inventoriable costs and period costs. O A. Inventoriable costs include direct manufacturing materials and direct manufacturing labor costs that are capitalized into inventory and remain on the balance sheet until sold. Period costs include indirect manufacturing (or manufacturing overhead) costs and are expensed as incurred through the cost of goods sold account. B. Inventoriable costs include material costs and are capitalized as assets to the company until the items are sold. Period costs include labor and overhead costs...
In absorption costing, the manufacturing costs expensed are greater than the amount expensed in variable costing...
In absorption costing, the manufacturing costs expensed are greater than the amount expensed in variable costing when units produced are less than sold because the units in beginning inventory under absorption costing were assigned a greater cost in the previous accounting period. O True False
Costs that are capitalized because they are expected to have future value are called product costs;...
Costs that are capitalized because they are expected to have future value are called product costs; costs that are expensed are called period costs. This classification is important because it affects the amount of costs expensed in the income statement and the amount of costs assigned to inventory on the balance sheet. Product costs are commonly made up of direct materials, direct labor, and overhead. Period costs include selling and administrative expenses. A service company has the following costs. (You...
Calculator Direct labor and direct materials are Oa. period costs and expensed when incurred Ob. product costs and expensed when incurred Oc. period costs and expensed when the goods are sold Od. product costs and expensed when the goods are sold
33. Research and Development costs are not expensed when determining the profitability of a project or shown on a projected income statement. a. True b. False
Distinguish between inventoriable costs and period costs. O A. Inventoriable costs include direct manufacturing materials and direct manufacturing labor costs that are capitalized into inventory and remain on the balance sheet until sold. Period costs include indirect manufacturing (or manufacturing overhead) costs and are expensed as incurred through the cost of goods sold account. B. Inventoriable costs include material costs and are capitalized as assets to the company until the items are sold. Period costs include labor and overhead costs...
In absorption costing, the manufacturing costs expensed are greater than the amount expensed in variable costing when units produced are less than sold because the units in beginning inventory under absorption costing were assigned a greater cost in the previous accounting period. O True False
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