0
Under absorption costing you will have direct materials direct labour variable manufacturing overhead and fixed overhead in to product cost. then this figure will be placed on the balance sheet as inventory then to COGS when sold.
However selling and administrative cost will be reflected the later part of the income statement and not in the cogs. These cost are know as the period cost because they are not related to the manufacturing process.
revenue - cogs = gross profit
gross profit - period cost= profit before taxes
What else can I help you with?
What's the difference between margin and markup when calculating pricing for products or services?
Margin is the percentage of profit made on a product or service, calculated as the difference between the selling price and the cost of production divided by the selling price. Markup, on the other hand, is the percentage added to the cost of production to determine the selling price. In essence, margin is based on the selling price, while markup is based on the cost of production.
What are the 4 economic factors of production on Chocolate?
Cost of cocoa beans Scale of production Cost to convert to chocolate Cost of selling and distribution
What is the minimum selling price for this product?
The minimum selling price for a product is the lowest price at which it can be sold to cover the cost of production and make a profit.
What is the relationship between marginal cost and marginal revenue in determining optimal production levels?
The relationship between marginal cost and marginal revenue in determining optimal production levels is that a company should produce at a level where marginal cost equals marginal revenue. This is because at this point, the company maximizes its profits by balancing the additional cost of producing one more unit with the additional revenue generated from selling that unit.
What will happen if a product becomes more popular and there is a fall in the cost of its production?
If a product increases in poularity, and decreases its production cost, I would expect that the company selling this product is going to enjoy increased profits.
What is the difference between production and selling costs?
production cost are how much it is to make the product and selling cost are how much you sell it for
What's the difference between margin and markup when calculating pricing for products or services?
Margin is the percentage of profit made on a product or service, calculated as the difference between the selling price and the cost of production divided by the selling price. Markup, on the other hand, is the percentage added to the cost of production to determine the selling price. In essence, margin is based on the selling price, while markup is based on the cost of production.
Different types of costs of production?
production cost, selling cost and sundry cost
How does the cost of production and the selling price affect the profit?
As a very rough approximation,Profit = Selling Price - Cost of Production.As a very rough approximation,Profit = Selling Price - Cost of Production.As a very rough approximation,Profit = Selling Price - Cost of Production.As a very rough approximation,Profit = Selling Price - Cost of Production.
Is selling cost a period cost?
Yes selling cost not directly relate to production of units that's why it is period cost.
Is the fixeds selling cost is fixed cost?
Selling cost which remains fixed and don't have any impact on production level is called fixed cost.
What are the 4 economic factors of production on Chocolate?
Cost of cocoa beans Scale of production Cost to convert to chocolate Cost of selling and distribution
What is selling a product at prices below the cost of production?
Dumping
Is Mark-up based on selling price?
Mark-up is setting your selling price a certain % higher than your production cost. So, it's probably more accurate to say that it is based on production cost. For instance, a 10% mark-up would establish a selling price that is 10% higher than your cost of production.
Distinguish between common cost and joint cost give three example?
hh
Why selling and admin price are not included in total production cost?
Selling and administration expenses are not used to produce the units rather these are used to sell or run the day to day activities of business. Production cost is that cost which is used to produce the units only.
The practice of selling a product abroad for less than the cost of production?
Dumping.
