The following is a list of costs that were incurred in the production and sale of lawn mowers: a. Attorney fees for drafting a new lease for headquarter offices b. Cash paid to outside firm for janitorial services for factory c. Commissions paid to sales representatives, based on the number of lawn mowers sold d. Cost of advertising in a national magazine e. Cost of boxes used in packaging lawn mowers f. Electricity used to run the robotic machinery g. Engine oil used in mower engines prior to shipment h. Factory cafeteria employees’ wages i. Filter for spray gun used to paint the lawn mowers j. Gasoline engines used for lawn mowers k. Hourly wages of operators of robotic machinery used in production l. License fees for use of patent for lawn mower blade, based on the number of lawn mowers produced m. Maintenance costs for new robotic factory equipment, based on hours of usage n. Paint used to coat the lawn mowers, the cost of which is immaterial to the cost of the final product o. Payroll taxes on hourly assembly line employees p. Plastic for outside housing of lawn mowers q. Premiums on insurance policy for factory buildings r. Property taxes on the factory building and equipment s. Salary of factory supervisor t. Salary of quality control supervisor who inspects each lawn mower before it is shipped u. Salary of vice president of marketing v. Steel used in producing the lawn mowers w. Steering wheels for lawn mowers x. Straight-line depreciation on the robotic machinery used to manufacture the lawn mowers y. Telephone charges for company controller’s office z. Tires for lawn mowers Instructions 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:

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Managerial Accounting

15th Edition

Carl Warren + 1 other

Publisher: South-Western College Pub

ISBN: 9781337912020

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BuyFind

Managerial Accounting

15th Edition

Carl Warren + 1 other

Publisher: South-Western College Pub

ISBN: 9781337912020

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Answer 5

To determine

Classify each of the costs as either a product cost or a period cost, and indicate whether it is a direct material cost, direct labor cost, or a factory overhead cost if it is product cost, and describe whether it is a selling expense or administrative expense if it is period cost.

Explanation of Solution

Product costs:

Product costs are the costs which are incurred in the production of the goods. These costs include the direct materials cost, direct labor cost, and factory overhead cost.

Period costs:

Period costs are the costs other than the product costs. These costs are not incurred in manufacturing the goods. These costs include the administrative expenses, and selling expenses.

Classify each of the costs as either a product cost or a period cost, and indicate whether it is a direct material cost, direct labor cost, or a factory overhead cost or describe whether it is a selling expense, or administrative expense.

Cost	Product Costs			Period Costs
Cost	Direct Materials Cost	Direct Labor Cost	Factory Overhead Cost	Selling Expense	Administrative Expense
a.					X
b.			X
c.				X
d.				X
e.	X
f.			X
g.			X
h.			X
i.			X
j.	X
k.		X
l.			X
m.			X
n.			X
o.		X
p.	X
q.			X
r...

Managerial Accounting

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Managerial Accounting

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