Textbook Problem

The following is a list of costs that were incurred in the production and sale of lawn mowers:

1. a. Attorney fees for drafting a new lease for headquarter offices
2. b. Cash paid to outside firm for janitorial services for factory
3. c. Commissions paid to sales representatives, based on the number of lawn mowers sold
4. d. Cost of advertising in a national magazine
5. e. Cost of boxes used in packaging lawn mowers
6. f. Electricity used to run the robotic machinery
7. g. Engine oil used in mower engines prior to shipment
8. h. Factory cafeteria employees’ wages
9. i. Filter for spray gun used to paint the lawn mowers
10. j. Gasoline engines used for lawn mowers
11. k. Hourly wages of operators of robotic machinery used in production
12. l. License fees for use of patent for lawn mower blade, based on the number of lawn mowers produced
13. m. Maintenance costs for new robotic factory equipment, based on hours of usage
14. n. Paint used to coat the lawn mowers, the cost of which is immaterial to the cost of the final product
15. o. Payroll taxes on hourly assembly line employees
16. p. Plastic for outside housing of lawn mowers
17. q. Premiums on insurance policy for factory buildings
18. r. Property taxes on the factory building and equipment
19. s. Salary of factory supervisor
20. t. Salary of quality control supervisor who inspects each lawn mower before it is shipped
21. u. Salary of vice president of marketing
22. v. Steel used in producing the lawn mowers
23. w. Steering wheels for lawn mowers
24. x. Straight-line depreciation on the robotic machinery used to manufacture the lawn mowers
25. y. Telephone charges for company controller’s office
26. 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: