2. Why is it important to sort costs into product costs and period costs? 3. What are some product costs related to McDonald's French fries? 4. What are some period costs related to the manufacture and sale of McDonald's French fries?
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- Felipes Restaurant and Pie Shop needs help defining the costs for his business. He also wants to know which costs are relevant or irrelevant to his decision. Identify each cost as relevant or irrelevant. Then identify the type of cost (sunk. fixed, variable, or opportunity).Why is it important to fully understand the cost associated with each item you sell or each service you provide? At the end of the day what does it mean?Why is it important to compare standard and actual food and beverage costs?
- 1. What is the difference between absorption costing and variable costing? 2. Distinguish between product costs and period costs. 5. How is it possible, under absorption cost- ing, to increase net income by simply pro- ducing more goods? 6. What is the difference between gross mar- gin and manufacturing margin? 9. How is a contribution margin determined, and why is it important to management? 12. What is the break-even point?How many should the company order per batch so that it can minimize its costs of carrying and ordering costs?What are these equations? c.Under absorption costing, what is the cost of goods sold? d.Under variable costing, what is the cost of goods sold? e.Under absorption costing, what is the operating income? f.Under variable costing, what is the operating income? g.Reconcile the difference in operating income under absorption costing versus variable costing.
- Manufacturing firms must calculate their cost of goods sold based on how much they manufacture and how much it costs them to manufacture those goods. This requires manufacturing firms to prepare an additional statement before they can prepare their income statement. This additional statement is the Cost of Goods Manufactured statement. Once the cost of goods manufactured is calculated, the cost is then incorporated into the manufacturing firm’s income statement to calculate its cost of goods sold. One thing manufacturing firms must consider in their cost of goods manufactured is that, at any given time, they have products at varying levels of production: some are finished and others are still process. The cost of goods manufactured statement measures the cost of the goods actually finished during the period, whether or not they were started during that period. True / False Even though the income statements for the merchandising firm and the manufacturing firm appear very similar at…HEB grocery How can the contribution margin be used to determine the profitability of HEB grocery company products and how could it be used to make the operations more profitable?Which of the following is the best definition of product costs? a. Product costs are those costs that change with changes in the level of product activity, over a defined period of time. b. Product costs are the costs associated with unsold products retained in stock. c. Product costs are overhead costs that are allocated over a number of products of the business for which costs are to be determined d. Product costs are those costs associated with goods or services purchased, or produced, for sale to customers
- Identify the following as fixed costs (F), variable costs (V), or mixed costs(M). cost of goods sold storeroom clerk wagesHow important is it to trace costs appropriately? Explain. As you are beginning to think about the importance of tracing costs appropriately, please consider the differences between variable costing and absorption costing. What implications does each of these have on such things as financial reporting of profit and pricing your products for the marketplace?1. Compute the unit product cost under absorption costing. 2. Compute the net income under absorption costing. 3. What will be the value of the ending inventory if the company is using absorption costing?