For Each of the Following, Indicate Whether the Cost Would

question 46

Multiple Choice

For each of the following, indicate whether the cost would typically be considered a product or period cost for the cost object given.
-Electricity costs to run the factory

• A)Product
• B)Period

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Definitions:

Standard Hours

The predetermined amount of time expected to complete a unit of work or job, serving as a benchmark for productivity and performance measurement.

Actual Output

The real quantity of goods or services produced by a company during a specific period.

Labour Efficiency Variance

The difference between the actual labor hours worked and the standard hours planned, multiplied by the standard labor rate.

Standard Labour Rate

A pre-established rate used to calculate the labor cost element of a product or service, based on expected wage rates.