At a dinner party you hosted, a friend of yours who is a college accounting professorâ€â€upon hearing you had started your own businessâ€â€told you to make sure to properly categorize product versus period costs and fixed versus variable costs. The friend did not have time to explain the difference or the importance of proper categorization to you.
Thinking this would be important information to pass on to your partner, do the following:
Research the topic.
Write a memo to your partner covering all of the following:
Write a description of the difference between product and period costs and examples of each.
Include the definition of fixed versus variable costs along with examples of each in manufacturing, service, and retail businesses
Explain how the financial results of a business would be reported differently if costs were not properly categorized.
Include citations and references in APA style.
For assistance, please use the Internet, the library, your text, Web resources, and all course materials.
Please submit your assignment.
The following rubric will be used for grading:
Grading Rubric
30%
15%: A description of the difference between product and period costs
15%: Examples of each
20%
10%: The definition of fixed versus variable costs
10%: Examples of each in manufacturing, service, and retail businesses
10%
Why proper categorization of these is important.
15%
How the results of a business would be reported differently if costs were not properly categorized.
15%
How bad decisions using incremental pricing might occur if improper classification occurs.
10%
Citations and references are in APA style.
For assistance with your assignment, please use your text, Web resources, and all course materials.
Unit Materials
Unit 2 Course Materials