BEC - 27 Flashcards
1
Q
Product Cost
A
a cost that attaches to the physical units
2
Q
What do product costs include
A
Direct Materials
Direct Mfg Labor
Mfg OH
3
Q
Conversion Cost
A
cost involved in converting the direct materials into a finished product
4
Q
Conversion costs include
A
direct mfg labor
mfg OH
5
Q
Period Cost
A
any cost that does not attach to the physical units
this means it is NOT a product cost.
Electricity would be included in MFG OH and therefore a conversion cost, NOT a period cost
6
Q
when are period costs expensed
A
as incurred
7
Q
Can a cost be both a period and product cost
A
No. It’s one or the other.
For example, electricity cost, whether variable or fixed, would be included in manufacturing OH and classified as conversion costs, and therefore cannot be classified as a period cost
