Cost Ch 2 Notes - Blank

Cost Ch 2 Notes - Blank - Chapter 2 Notes Product Costing...

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Chapter 2 Notes Product Costing Systems: Concepts and Design Issues Learning objectives: This chapter has eight learning objectives: 1. Explain the role of product costs, period costs, and expenses in financial statements. 2. Prepare an income statement and a schedule of cost of goods manufactured and sold. 3. List the components of manufacturing cost, and diagram their flow through a manufacturing process. 4. Explain how unit-level, variable, and fixed costs differ. 5. Understand the concepts of opportunity costs, sunk costs, committed costs, direct costs, and indirect costs. 6. Prepare income statement using absorption, variable, and throughput costing. 7. Reconcile income under absorption, variable, and throughput costing. 8. Discuss the advantages and disadvantages of absorption, variable, and throughput costing. Cost Accounting - Chapter 2 Notes Page 1
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The role of product costs, period costs, and expenses in the financial statements 1.At the most basic level, a cost _____________________________ 2.Expense is defined as ____________________________________ 3.Product cost is a cost ____________________________________ 4.Costs of goods sold is ____________________________________ Cost Accounting - Chapter 2 Notes Page 2
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5.Period costs are defined as _____________________________ Preparing income statement and schedule of costs of goods manufactured and sold 1.Service firms ___________________________________________ a. Characteristics i. Do not carry___________________________________ ii. Do not have __________________________________ ____________________________________________ 2.Retail and wholesale companies ___________________________ a. Characteristics i. Show a ______________________________________ ____________________________________________ Cost Accounting - Chapter 2 Notes Page 3
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ii. Subtracting COGS from _________________________ ____________________________________________ iii. Other expenses (selling and administrative)________ ____________________________________________ 3.At the end of the year, for merchandising firms, ______________ 4.Manufacturing companies carry three kinds of inventory: a. _________________________________________________ b._________________________________________________ c. _________________________________________________ Cost Accounting - Chapter 2 Notes Page 4
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5.For both merchandising and manufacturing firms, _____________ 6.All expenses, except _____________________________________ Cost Accounting - Chapter 2 Notes Page 5
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7.The components of a statement of cost of goods
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This note was uploaded on 06/11/2008 for the course ACCT 308 taught by Professor Wormer during the Spring '08 term at CofC.

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Cost Ch 2 Notes - Blank - Chapter 2 Notes Product Costing...

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