Answer
b. i. These are material costs that are incurred when materials are received and handled. Thus they are directly related to the revenue. They should be recognized in the period they were incurred.
b. ii. These cost items are not directly related to revenues. They should be recognized as expenses.
Work Step by Step
b. i. These are material costs that are incurred when materials are received and handled. Thus they are directly related to the revenue. They should be recognized in the period they were incurred.
b. ii. These cost items are not directly related to revenues. They should be recognized as expenses.
