Classifying period costs and product costs Lawlor, Inc. is the manufacturer of lawn care equipment. The company incurs the following costs while manufacturing weed trimmers: Shaft and handle of weed trimmer The motor of weed trimmer Factory labor for workers assembling weed trimmers Nylon thread used by the weed trimmer (not traced to the product) Glue to hold the housing together Plant janitorial wages Depreciation on factory equipment Rent on plant Sales commissions Administrative salaries Plant utilities Shipping costs to deliver finished weed trimmers to customers Requirements Describe the difference between period costs and product costs. Classify Lawlor’s costs as period costs or product costs. If the costs are product costs, further classify them as direct materials, direct labor, or manufacturing overhead.
Classifying period costs and product costs Lawlor, Inc. is the manufacturer of lawn care equipment. The company incurs the following costs while manufacturing weed trimmers: Shaft and handle of weed trimmer The motor of weed trimmer Factory labor for workers assembling weed trimmers Nylon thread used by the weed trimmer (not traced to the product) Glue to hold the housing together Plant janitorial wages Depreciation on factory equipment Rent on plant Sales commissions Administrative salaries Plant utilities Shipping costs to deliver finished weed trimmers to customers Requirements Describe the difference between period costs and product costs. Classify Lawlor’s costs as period costs or product costs. If the costs are product costs, further classify them as direct materials, direct labor, or manufacturing overhead.
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter2: Basic Managerial Accounting Concepts
Section: Chapter Questions
Problem 37E: Assigning Costs to a Cost Object, Direct and Indirect Costs Hummer Company uses manufacturing cells...
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Question
Classifying period costs and product costs Lawlor, Inc. is the manufacturer of lawn care equipment. The company incurs the following costs while manufacturing weed trimmers:
- Shaft and handle of weed trimmer
- The motor of weed trimmer
- Factory labor for workers assembling weed trimmers
- Nylon thread used by the weed trimmer (not traced to the product)
- Glue to hold the housing together
- Plant janitorial wages
Depreciation on factory equipment- Rent on plant
- Sales commissions
- Administrative salaries
- Plant utilities
- Shipping costs to deliver finished weed trimmers to customers
Requirements
- Describe the difference between period costs and product costs.
- Classify Lawlor’s costs as period costs or product costs. If the costs are product costs, further classify them as direct materials, direct labor, or manufacturing overhead.
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