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Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

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BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Product and period costs

Identify the following costs as a product cost or a period cost for an automobile manufacturer:

a. Steel

b. Wages of employees that operate painting equipment

c. Rent on office building

d. Sales staff salaries

a.

To determine

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.

To identify: The given costs as a product cost or a period cost for an automobile manufacturer.

Explanation

The cost of the steel is the product cost.

The cost of the steel is the product cost as it is the d...

b.

To determine

To identify: The given costs as a product cost or a period cost for an automobile manufacturer.

c.

To determine

To identify: The given costs as a product cost or a period cost for an automobile manufacturer.

d.

To determine

To identify: The given costs as a product cost or a period cost for an automobile manufacturer.

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