A202 Chapter 3 Notes
A202 Chapter 3 Notes BUS-A202
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This 1 page Class Notes was uploaded by Lauren Detweiler on Sunday February 1, 2015. The Class Notes belongs to BUS-A202 at Indiana University taught by Diane Biagioni in Spring2015. Since its upload, it has received 117 views. For similar materials see Managerial Accounting in Business at Indiana University.
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Date Created: 02/01/15
A202 Week 3 Prof Biagioni Textbook Notes Chapter 3 Cost Flows and Cost Terminology I Product and Period Costs a Product cost costs associated With getting products and services ready for sale i Appear above the line for gross margin revenues less product costs b Period cost all costs that are not product cost i Do not directly relate to readying products and services for sale II Cost Flows in Service Organizations a The products service rms offer are not tangible or storable i ie consulting rm hotel airline ii Don t have an inventory of products b Income statements i Product costs ie instructor salaries rent equipment depreciation utilities maintenance supplies ii Period costs ie accounting of ce rent advertising sales staff III Cost Flows in Merchandising Organizations a Merchandising rms buy goods from suppliers and resell substantially the same products to customers i ie retailers like Macy s Sears grocery stores like Kroger of ce products stores like Of ce Depot and Staples b Inventory of goods that they buy and sell c Inventory equation us tinginning inu nmn Us ul39gumlx mu llll39l lining llu39 pm ind usulill li11ginunlnn us nl gmulx sold I39I39S39I11 nglllt lwl39iud d e Flow of costs i Cost incurred goods purchased 9 inventory account balance sheet 9 product costs 9 COGS income statement ii Costs incurred ie accounting sales staff advertising of ce rent 9 period costs 9 selling and admin costs income statement IV Cost Flows in Manufacturing Organizations a Manufacturing rms use labor and equipment to transform inputs such as raw materials and components into outputs b Inventories of raw materials and components partly nished items and nished goods
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