. Distinguish between manufacturing-, merchandising-, and service-sector companies. 2. Distinguish between inventoriable costs and period costs. 3. Classify each of the cost items (a–h) as an inventoriable cost or a period cost. Explain your answers.
Each of the following cost items pertains to one of thesecompanies: General Electric
(a manufacturing-sector company), Safeway (a merchandising-sector company),
and Google (a service-sector company):
a. Perrier mineral water purchased by Safeway for sale to its customers
b. Electricity used to provide lighting for assembly-line workers at a General Electric
refrigerator assembly plant
c.
sites
d. Electricity used to provide lighting for Safeway’s store aisles
e. Depreciation on General Electric’s computer equipment used for quality testing of
refrigerator components during the assembly process
f. Salaries of Safeway’s marketing personnel planning local-newspaper advertising
campaigns
g. Perrier mineral water purchased by Google for consumption by its software
engineers
h. Salaries of Google’s marketing personnel selling banner advertising
Required:
1. Distinguish between manufacturing-, merchandising-, and service-sector
companies.
2. Distinguish between inventoriable costs and period costs.
3. Classify each of the cost items (a–h) as an inventoriable cost or a period cost.
Explain your answers.
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