Companies accumulate costs based on the distinction between costs for their product or service and other operating costs. This assignment will help you to further understand the classifications of costs and types of costs assigned to a product or service. This concept is important because net income must be properly measured and inventory must be properly reported on the balance sheet.

Based on the Chapter 2 reading, discuss the following cost accounting concepts: Distinguish between product costs and period costs and describe how using these cost concepts contribute to the cost accounting framework.

Assignment Requirements

You will describe costs which are included in inventory (product costs) and describe costs classified as period costs. Examples of each cost type are included. You will explain where product costs and period costs are found in the income statement.

Describes product costs and period costs Describes examples of both product and period costs Discusses the income statement where product costs are found and where period costs are found