BUSI 2201 Chapter 2: Managerial Accounting ch 2
Document Summary
Resell tangible products they buy from suppliers. They have inventory of purchased goods assets. Product (inventoriable) costs which include the cost paid for the goods plus all costs necessary to get the merchandise ready for sale (e. g. freight-in costs, import duties, etc. ) Operating expenses (period costs/sg&a (selling, general, and. Administrative expenses)) costs to operate the business, e. g. advertising, salary, administrators expenses, taxes, insurance, utilities, etc: service firms. Sell intangible services (health care, insurance, banking, etc. ) Little or no inventory (all inventory are products that are used during the service provided) All operating expenses (period costs), such as salaries, utilities, insurance, advertising, taxes, etc: manufacturing firms. Convert raw materials into furnished goods using labor and equipment, e. g. car, furniture, electronics manufacturers. Manufacturers have three types of inventory: fabric, leather in furniture products) (e. g. steel, glass, tires, engines in car manufacturing; wood, Raw materials inventory materials used in manufacturing. Work-in-process inventory goods that are in process but not.
