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Product costs are recognised as expenses when those products are sold to third party or end user until that cost remains as an asset in business.
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What is the general approach as to when product cost are recognized as an expense?
Product costs are recognised as expenses when those products are sold to third party or end user until that cost remains as an asset in business.
What is the rationale for recognizing costs as expenses at the time of product sale?
Matching Cost against Revenue principles stipulate that a revenue generated must have an associated cost to it. As & when a revenue is recognized, so is the cost.
Like product costs are not necessarily treated as expenses in the period in which they are incurred?
Like product costs, which include direct materials, labor, and overhead, are initially capitalized as inventory on the balance sheet rather than being treated as expenses immediately. These costs are only recognized as expenses when the inventory is sold, at which point they are recorded as cost of goods sold (COGS) on the income statement. This matching principle aligns expenses with revenues, providing a clearer picture of profitability for a given period. Thus, the treatment of these costs reflects the timing of their impact on financial statements.
What are examples of distribution expenses?
Distribution expenses are expenses related to getting the product from the place of manufacturing to the place where it is sold. This could include expenses related to import or export, postage, fuel, trucks, etc.
List of direct expenses?
Some direct expenses include direct labor and materials. Companies try to reduce the cost of direct expenses because they impact the cost of the product.
What is the general approach as to when product cost are recognized as an expense?
Product costs are recognised as expenses when those products are sold to third party or end user until that cost remains as an asset in business.
What is the rationale for recognizing costs as expenses at the time of product sale?
Matching Cost against Revenue principles stipulate that a revenue generated must have an associated cost to it. As & when a revenue is recognized, so is the cost.
Is professional fee expense an administrative expense or a selling expense?
Expenses which are incurred for the selling of product is called Selling Expenses while expenses incurred on administration of general day to day tasks are called administration expenses
What is commodity or product approach?
Commodity = needs Product = quality In my POV, the commodity approach merely focuses on the consumers' demands whilst the product approach focuses on bringing consumer demand by creating a product that's of great quality.
Explain the matrix approach to product planning?
Explain the Matrix approach to product planning. Suggest a Marketing strategy on the basis of the product evaluation matrix.
Like product costs are not necessarily treated as expenses in the period in which they are incurred?
Like product costs, which include direct materials, labor, and overhead, are initially capitalized as inventory on the balance sheet rather than being treated as expenses immediately. These costs are only recognized as expenses when the inventory is sold, at which point they are recorded as cost of goods sold (COGS) on the income statement. This matching principle aligns expenses with revenues, providing a clearer picture of profitability for a given period. Thus, the treatment of these costs reflects the timing of their impact on financial statements.
What is product approach?
The phrase 'product approach' mostly applies to the world of retail sales. It is when a sales person learns everything there is to know about a product, and can then recite all the features and benefits of the product to potential customers.
What does indirect expenses mean?
Indirect Expenses are those expenses which are incurred after the manufacturing process is over, e.g. selling and distribution expenses, all the administrative expenses, carraige outward, advertisement expenses because they are related indirectlt with the product manufacturing and sales.
What are examples of distribution expenses?
Distribution expenses are expenses related to getting the product from the place of manufacturing to the place where it is sold. This could include expenses related to import or export, postage, fuel, trucks, etc.
List of direct expenses?
Some direct expenses include direct labor and materials. Companies try to reduce the cost of direct expenses because they impact the cost of the product.
What is Cost of revenue what is operating expenses?
The cost of revenue is the cost to produce a product. Operating expenses are expenses that have to be paid in order to stay in business like rent, utilities, etc.
What is the difference between preliminary and preoperative expenses?
THERE IS NO DIFFERENCE BETWEEN PRELIMINARY AND PREOPERATIVE EXPENSES. THESE EXPENSES ARE INCURED IN BREFORE OPENING THE DOORS OF A BUSINESS OR RELEASING A NEW PRODUCT INTO THE MARKET ETC.. FOR EXAMPLE ADVERTISMENT, PRELAUNCHING EXPENSES, ETC.
