Back to the full dot-point answer
VICAccountingQuick questions
Unit 3: Financial accounting for a trading business
Quick questions on Product and period costs (VCE Accounting Unit 3)
2short Q&A pairs drawn directly from our worked dot-point answer. For full context and worked exam questions, read the parent dot-point page.
What is treating the freight (product cost)?Show answer
Freight inward is a product cost, so the total cost of the 100 units becomes 5,000 + 300 = 5,300 dollars. The per unit cost on the inventory card rises to 5,300 divided by 100 = 53 dollars per unit.
What is treating the advertising (period cost)?Show answer
Advertising of 800 dollars cannot be allocated to units, so it is recorded as an Advertising expense in the Income Statement in the period incurred, reducing profit now.
Have a question we have not covered?
This dot-point answer is short enough that we have not extracted many short questions yet. Read the full dot-point answer or ask Mo, our study assistant, in the chat for follow ups.