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Dear Expert, These are issues of accounting. A manufacturing cost that can be traced conveniently and...

Dear Expert,

These are issues of accounting.

A manufacturing cost that can be traced conveniently and directly to manufactured unit of products. What do we call this cost?

Cost that are debited directly to expence accounts when the cost are incurred. What do we call this cost?

Business   Accounting   
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Answer #1

A manufacturing cost that can be traced conveniently and directly to manufactured unit of products. - Product costs

(Product cost are the costs that are incurred to create a product. These costs include direct labor, direct materials, consumable production supplies, and factory overhead.)

Cost that are debited directly to expence accounts when the cost are incurred. - Period costs

(period costs are mainly with the selling function of the business or its general administration. Examples of these costs are general and administrative expenses, such as rent, office depreciation, office supplies, and utilities.)

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