A New Employee in the Accounting Department Is Having Difficulty

question 187

Essay

A new employee in the accounting department is having difficulty understanding two sets of accounting terms-variable and fixed costs as opposed to period and product costs.He understands that variable costs change during an accounting period while fixed costs do not.However, he explains that a period cost implies that it is for a period of time and is, therefore, also fixed.Does his assumption imply that all product costs are then variable?
Required:
As part of your responsibility to train new staff, explain the difference between these terms.

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Definitions:

False Impression

Presenting information or conducting oneself in a way that intentionally misleads others.

Ethical Decision-making

The process of choosing actions that are ethical and reflect the values of an individual or organization, often involving complex considerations.

Conflict

A situation that arises when differing needs, beliefs, or interests collide, potentially causing disagreement or dispute among individuals or groups.

Values

Core beliefs or standards that guide and motivate attitudes and actions in individuals and organizations.