the difference between a product cost and a period cost is explained below.
Costs are classified as either product costs or period costs for the purposes of valuing inventories and evaluating expenses for the balance sheet and income statement.
Product costs are allocated to inventories and are treated as assets till the products have been sold.
Product costs become the cost of goods sold on the income statement at the point of sale.
Period costs, on the other hand, are directly taken to the income statement as expenses for the period in during which they are incurred, according to standard accrual practices.
Product cost in a merchandising company is how much the company has paid for its merchandise.
In a manufacturing company's external financial reports, product costs include all manufacturing costs.
Selling and administrative costs are regarded as period costs in both types of businesses and are expensed as they are incurred.
Hence, product cost and periodic cost differ in nature.
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Answer:
Option to expand
Explanation:
Pay attention to this part of this excerpt:
<em>" Sales arising from this project are significantly less than anticipated"</em>
Where sales is lower than exception, one thing that company can do is to try different ways to increase the target market for their products. This is what referred to as Option to expand.
In order to do this, they can try different things:
- They can increase the number of productions and spread their products to different location.
- They can make adjustment to their products so it appeals to different type of customers,
etc.
Answer: cost cutting
Explanation:
3D printing technology is a from of technological innovation which people not many people know about and is less understood by the people and therefore few people might see reason to buy it.
The increase in the competitors offering the product and a price reduction can actually help the product from from the introduction to the growth stage of its life cycle.
The makers of the 3D printers should be more conceened with enhancing distribution, increasing capacity, forecasting and product and process reliability. They should be less concerned about cost-cutting as there are bigger issues to solve.