read: Principles of Accounting, Chapter 17: Introduction to Managerial Accounting: http://www.principlesofaccounting.com/chapter-17/Part 1
Accounting for management decisions can be different from accounting to provide financial statements. One aspect of accounting for management decisions is the budgeting process.
Read the following statements and note by each, whether the statement is true or false. Restate the false statements in such a way as to make them true statements.
Billboard advertising space would be period cost, not a product cost.
Beginning work in process, plus conversion costs, minus ending work in process, equals cost of goods manufactured.
Conversion costs are always the same, no matter the level of output.
Production costs generally consist of prime costs plus manufacturing overhead.
Product costs attach can also be described as “inventoriable.”
The cost of air filters used in the paint shop of a manufacturing facility is a period cost because they are replaced monthly.
Non-manufacturing costs for selling and general/administrative purposes are not part of factory overhead.
Manufacturers may have three inventory categories: raw materials, finished goods, and cost of goods sold.
The cost of carbon fiber incorporated into the frame of a bicycle built by TecTrack Bikes is a product cost.
Prime costs include direct labor and manufacturing overhead.
Part 3 For this week’s reflection, please write three complete and well-composed paragraphs (in your own words) in which you use, as an example, a company that operates in grenada West indies. Describe what business it is in and some of the costs the company incurs. Define the various types of costs you identified as period or product costs.