What Is the Result of a Repudiation

question 29

Essay

What is the result of a repudiation?

Apply concepts of purchase discounts, purchase returns, and allowances in inventory accounting.

Understand the legal and accounting aspects of FOB shipping point and FOB destination terms.

Differentiate between variable costs (e.g., freight-in costs, production supervisory salaries) that contribute to inventory valuation and those that do not (e.g., freight-out costs, selling costs).

Understand the principles of inventory costing methods including FIFO, LIFO, and weighted average.

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Definitions:

Insurance Premiums

The amount of money that an individual or business must pay for an insurance policy.

Direct Materials Cost

The expense associated with the raw materials directly used in the production of a product.

Cost Behavior Classifications

The categorization of costs based on how they change in relation to changes in a company’s level of activity or volume.

Activity Base

A measure upon which the allocation of costs is based in activity-based costing, often relating to a metric that causes costs to occur such as machine hours or labor hours.