Management and Organizational Studies 1023A/B Chapter Notes -Indirect Costs, Gross Margin, Financial Statement

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 1023A/B
• Professor: Maria Ferraro

Document Summary

Pg 75- 86 cost flows and cost terminology: Production costs costs associated with getting products ready for sale. Always appear above gross margin (=rev product costs) Include: salaries, equipment maintenance, supplies, depreciation. Period costs not directly related to the readying of products and services. Include items incurred with the passage of time: rent, advertising, customer service, accounting, selling and admin costs. Financial statements provide limited info about opportunity costs: it is vital to use info on accounting statements in accordance with nonfinancial info to make the best decision. Financial statements separate product from period costs, but: combine controllable with noncontrollable costs and, fixed costs with variable costs. Merchandising firm buy goods and resell substantially the same product to consumers. Maintain inventory of goods they buy and sell. Distinguishes cost of goods purchased from cogs: firms expense the cost of the item only when the item is sold.