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Is depreciation of factory buildings classified as a period cost or product cost?
If factory building is used in production of units of product then it will be added to product cost as it is part of product to manufacture.
What is unit cost and total cost?
Unit Cost: It is the cost utilized to manufacture one unit of product Total Cost: It is the cost utilized to manufacture specific volume/ number of units of product Example: 10000 cost spent on production of 1000 units of product so 10000 is a total cost & 10000/1000 = 10 is a unit cost
Do transportation costs increase or decrease the cost of the merchandise?
Increase. Product cost is a reflection of the cost to manufacture and ship the product, as well as middleman markups.
What is a labor costs?
Labor Cost is the direct labor utilized to manufacture the product. For Example: 10 labor hours required to manufacture 1 unit of product and labor cost per hour is 10 so total labor cost to manufacture 1 unit is 100 (10 * 10).
What are three major cost components of a manufactured product?
Materials(the cost of the raw materials used in the product) Labour(the cost in employing workers to manufacture the product) Transportation(the costs associated with both the transportation of the materials and of the finished product)
What is the difference between cost of goods manufactured and cost of goods sold?
How do you calculate cost of goods sold for a manufacture company
What is the cost to manufacture a video game controller?
It matters by the company, style, and the way it is. It matters by the company, style, and the way it is.
Differentiate between period cost and product cost?
Period Cost: It is that cost which must be incurred by the company no matter it produce any product or not. Product cost: Product cost is that cost which is necessary to produce any production units to earn revenue.
Is direct labor cost a period cost?
Direct labor is a product cost as it is required to manufacture the units of product, Direct Labor may be a period cost in that period where there is no production but management still paying the labor all salaries and wages.
Transportation costs incurred by a manufacturing company to ship its product to its customers would be classified as which of the following a. Product cost b. Manufacturing overhead c. Period cost?
Product cost
What is the difference between traditional based costing and target costing?
Traditional Cost Accounting System: In this system company first produce the product and then determine the cost of production and then try to sell that product at price covering that cost plus certain percentage of markup on cost.Target Costing: In this system first of all company determines the value of product in the eyes of customer that is how much a customer is willing to pay for the product and then if cost of production of that product is more then the customer willing to pay then company makes analysis of how they can reduce the cost of production to the level of cost a customer willing to pay by reducing the components of product which is costing towards final price but not giving any value to customer and in this way company tries to acheive the target cost customer willing to pay.
What is the difference between cost of sales and sales?
Sales is the revenue of company while cost of sales is the cost of goods which are used to manufacture the units of products for sales purpose
