Period+Product Flashcards
1
Q
Period cost
A
A cost incurred in order to bring inventory into a condition and location ready for sale that is not allocated to individual units of inventory because there is no logical basis to do so.
2
Q
Product cost
A
A cost incurred in order to bring inventory into a condition and location ready for sale which can be allocated to individual units of
inventory on a logical basis.
3
Q
Difference
A
can the inventory be allocated.
Product cost is used when the expense can be allocated on a per unit basis where as
period cost is when the expense can not be allocated on a per unit basis.
