Part 1: This introductory chapter classifies expenses in many different ways. In your own words define the following terms and give an example of each:

1. Direct
2. indirect
3. Prime, Conversion
4. Product
5. Period

Part 2: In Financial Accounting you learn how to deal with Merchandise Inventory but now in Managerial Accounting you are presented with three inventories. In your own words describe the three inventories and how they relate to one another.