Product Costing question

[laineytheman]

If, say a washing machine was bought for $500 and had a $40 delivery fee, would you include it in the cost price as it can logically be assigned, or would you put it as a period cost because it does not pass the materiality 10% test (which would be 10%=$50)

period or product? This is an eg btw

[Fyrefly]

Materiality...

More than 10% = material
Less than 5% = immaterial
*But* between 5-10% is discretionary.

I would advise you to mention the discretionary thing, justify that it is more relevant to include the delivery fee as a product cost because it can be logically assigned, then include it as such.
This way, you get the chance to demonstrate your knowledge of accounting more fully!

[Flaming_Arrow]

in vce accounting ( as it rather ambigious), but just to be safe you should always assign it as product cost if it can be logically allocated into each individual stock item and it is a cost incurred in getting the item into a location and in a condition ready for sale, regardless of the amount. i've had this discussion with a teacher and he said as long as you justify it correctly you should be given full marks

[Ilovemathsmeth]

I'd assign it as a product cost and then leave a note saying that it doesn't really satisfy the 10% materiality test. You've done this because it can be logically assigned to the item.