Classify each cost as either a product cost or a period cost. Indicate whether each product cost is a direct materials cost, a direct labor cost, or a factory overhead cost. Indicate whether each period cost is a selling expense or an administrative expense. Use the following tabular headings for your answer, placing an “X” in the appropriate column: Production Cost Period Cost Cost Direct Materials Cost Direct Labor Costs Factory Overhead Cost Selling Expense Administrative Expense
Classify each cost as either a product cost or a period cost. Indicate whether each product cost is a direct materials cost, a direct labor cost, or a factory overhead cost. Indicate whether each period cost is a selling expense or an administrative expense. Use the following tabular headings for your answer, placing an “X” in the appropriate column: Production Cost Period Cost Cost Direct Materials Cost Direct Labor Costs Factory Overhead Cost Selling Expense Administrative Expense
Chapter6: Activity-based, Variable, And Absorption Costing
Section: Chapter Questions
Problem 10MC: What is the proper order of tasks In an ABC system? identify the cost drivers, assign the costs to...
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Classify each cost as either a product cost or a period cost. Indicate whether each product cost is a direct materials cost, a direct labor cost, or a factory overhead cost. Indicate whether each period cost is a selling expense or an administrative expense. Use the following tabular headings for your answer, placing an “X” in the appropriate column:
Production Cost | Period Cost |
Cost | Direct Materials Cost | Direct Labor Costs | Factory Overhead Cost | Selling Expense | Administrative Expense | |
The following is a list of costs that were incurred in the production and sale of lawn mowers:
- Attorney fees for drafting a new lease for headquarter offices
- Cash paid to outside firm for janitorial services for factory
- Commissions paid to sales representatives, based on the number of lawn mowers sold.
- Cost of advertising in a national magazine
- Cost of boxes used in packaging lawn mowers
- Electricity used to run the robotic machinery
- Engine oil used in mower engines prior to shipment
- Factory cafeteria employees’ wages
- Filter for spray gun used to paint the lawn mowers
- Gasoline engines used for lawn mowers
- Hourly wages of operators of robotic machinery used in production
- License fees for use of patent for lawn mower blade, based on the number of lawn mowers produced
- Maintenance costs for new robotic factory equipment, based on hours of usage
- Paint used to coat the lawn mowers, the cost of which is immaterial to the cost of the final product
- Payroll taxes on hourly assembly line employees
- Plastic for outside housing of lawn mowers
- Premiums on insurance policy for factory buildings
- Property taxes on the factory building and equipment
- Salary of factory supervisor
- Salary of quality control supervisor who inspects each lawn mower before it is shipped
- Salary of vice president of marketing
- Steel used in producing the lawn mowers
- Steering wheels for lawn mowers
- Straight-line
depreciation on the robotic machinery used to manufacture the lawn mowers - Telephone charges for company controller’s office
- Tires for lawn mowers
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