ACCT 2102 3 Lecture I Sustainability and Social Responsibility II Triple Bottom Line 1st Edition Lecture Outline of Last Outline of Current Lecture III Basic Business Model Service companies Merchandising companies Manufacturing companies IV Value Chain Current Lecture Building Blocks of Managerial Accounting Chapter 2 Part 1 III Basic business models IV Mostly deal with merchandising and manufacturing but rarely do we deal with service o Service companies Have no inventory Example accounting firm o Merchandising companies Buy items from other companies and resell them Example Walmart o Manufacturing companies Make goods Example Apple and Honda Value Chain Adding value to the company s products Research and Development Design Production or Purchase Marketing Distribution Customer Service A company incurs cost in every activity of the value chain These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute Total costs should be used for internal decision making However GAAP says we must treat certain costs as inventoriable product costs and all others as period costs for financial reporting purposes Period costs or office costs are acquired in the administration or sales department SG A and are expensed when incurred o If the product is out of the factory then it is a period cost Product costs or factory or inventorial costs are expensed when sold COGS Cost of goods sold o If product is still in factory then it is a product cost
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