Concept introduction:
There are three types of costs according to the unit of production; Variable, Fixed and Mixed. Variable costs change proportionally with the number of units produced and variable cost per unit remains constant. Fixed Cost remains same in totality irrespective of the number of units produced. The mixed cost is the mix of variable and fixed cost, some of its part is fixed and some variable.
To indicate:
The financial statement to find the amount of period cost
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Managerial Accounting
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- How do companies recognize revenue from a performanceobligation over time?arrow_forwardHow is Profit Margin calculated and what does It measure? What are some of the sources where one can Find financial information? What is an operating cycle and how it is Calculated?arrow_forwardWhat are the Cost Product Cost and External Financial reporting?arrow_forward
- Between the operational cycle of a service company and a buying and selling company, which is the longest?arrow_forwardIn a restated set of financial statements prepared in accordance with the current cost accounting, how much would appear as Net income?arrow_forwardWith respect to cost classifications for preparing financial statements:a. What is the total product cost?b. What is the total period cost?arrow_forward
- How do you prepare an income statement/calculate the operating income in managerial accounting?arrow_forwardClassify the Costs for Financial Statements?arrow_forwardAn analyst must be familiar with the concepts involved in determining income. The amount of in- come reported for a company depends on the recognition of revenues and expenses for a given time period. In certain cases, costs are recognized as expenses at the time of product sale; in other situations, guidelines are applied in capitalizing costs and recognizing them as expenses in future periods. Explain the rationale for recognizing costs as expenses at the time of product sale. What is the rationale underlying the appropriateness of treating costs as expenses of a period instead of assigning the costs to an asset? Explain. Under what circumstances is it appropriate to treat a cost as an asset instead of as an expense? Explain. Certain expenses are assigned to specific accounting periods on the basis of systematic and rational allocation Identify the conditions necessary to treat a cost as a loss.arrow_forward
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