BEC B3 Exam Questions & Answers 2024/2025
What are product costs? - ANSWERSPRODUCT COSTS ARE INVENTORY/INVENTORIABLE COSTS
Assets that remain on the B/S until they are sold
all costs associated with mfg. a product
FORMULA:
product cost - ANSWERSDM + DL + MOH
What are period cost...
What are product costs? - ANSWERSPRODUCT COSTS ARE INVENTORY/INVENTORIABLE COSTS
Assets that remain on the B/S until they are sold
all costs associated with mfg. a product
FORMULA:
product cost - ANSWERSDM + DL + MOH
What are period costs? - ANSWERSNON INVENTORIABLE
they are costs expensed in the period that they occur
ONLY ON I/S
Ex: debt financing, SG&A, salaries of HR, interest, depreciation
What are manufacturing costs? - ANSWERSthey are also product costs (inventoriable)
ALL INDIRECT AND DIRECT COSTS
What is the difference between direct costs and indirect costs? - ANSWERSdirect costs (DM, DL) are
traceable
, indirect costs (mostly MOH) are not traceable and can be allocated using traditional or activity based
costing
FORMULA:
conversion costs - ANSWERSDL + FOH
FORMULA:
prime costs - ANSWERSDM + DL
What are non-manufacturing costs/ - ANSWERScosts that all period costs (noninventoriable)
don't relate to the manufacturing of a product
ex: SG&A
MOH includes - ANSWERSboth direct and indirect costs
Indirect costs include - ANSWERSMOH, any OH, IL (jannetorial staff, trainings), other (rent, utilities,
depreciation)
What is the relevant range? - ANSWERSthe range for which the assumptions of the cost driver are valid
What is a cost driver? - ANSWERSactivities that cause costs to increase as activity increases
can be financial or nonfinancial
nonfinancial would be DL hours, machine hours, etc.
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