It is a cost tha benefits the current period and is not traceable to goods

It is a cost tha benefits the current period and is

This preview shows page 4 - 8 out of 41 pages.

Electricity for Sobeys store aisles—period cost of a merchandising company. It is a cost that benefits the current period and is not traceable to goods purchased for resale. 5. Depreciation on Toyota’s assembly testing equipment—inventoriable cost of a manufacturing company. It is part of the manufacturing overhead that is included in the manufacturing cost of a truck finished good. 6. Salaries of Sobeys marketing personnel—period cost of a merchandising company. It is a cost that is not traceable to goods purchased for resale. It is presumed not to benefit future periods (or at least not to have sufficiently reliable evidence to estimate such future benefits). 7. Water consumed by Google’s engineers—period cost of a service company. Google has no inventory of goods for sale and, hence, no inventoriable cost. 8. Salaries of Google’s marketing personnel—period cost of a service company. Google has no inventory of goods for sale and, hence, no inventoriable cost. 2-16 (15–20 min.) Classification of costs, service sector. Cost object: Each individual focus group Cost variability: With respect to the number of focus groups There may be some debate over classifications of individual items, especially with regard to cost variability. Cost Item D or I V or F A D V B I F C I Va D I F E D V F I F
G D V H I Vb a Some students will note that phone call costs are variable when each call has a separate charge. It may be a fixed cost if Buyer Research has a flat monthly charge for a line, irrespective of the amount of usage. b Gasoline costs are likely to vary with the number of focus groups. However, vehicles likely serve multiple purposes, and detailed records may be required to examine how costs vary with changes in one of the many purposes served. 2-17 (15–20 min.) Classification of costs, merchandising sector. Cost object: DVD section of store Cost variability: With respect to changes in the number of DVDs sold There may be some debate over classifications of individual items. Debate about cost variability is more likely. Cost Item D or I V or F A D F B I V C D V D I F E I F F I V or F G I F H D V 2-18 (15–20 min.) Classification of costs, manufacturing sector. Cost object: Type of car assembled (Corolla or Geo Prism)

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture