Write a Brief Summary and Explain Why Managers Account for Inventoriable

question 128

Essay

Write a brief summary and explain why managers account for inventoriable and period costs.Explain the differences between inventoriable and period costs.

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Definitions:

Direct Materials

Raw materials that can be directly attributed to the production of specific goods or products, unlike indirect materials which cannot be directly linked to production.

Price Variance

The difference between the actual price paid for a good or service and its expected (budgeted) price.

Standard Price

The predetermined cost that a company expects to pay for goods or services under normal conditions.

Direct Labor Rate Variance

The variance between the real expense of direct labor and its anticipated (or standard) price, employed in analyzing manufacturing costs.