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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

Classifying costs as product or period costs

For apparel manufacturer Abercrombie & Fitch, Inc., classify each of the following costs as either a product cost or a period cost:

a. Cost of information technology support for the corporate headquarters

b. Depreciation on sewing machines

c. Fabric used during production

d. Depreciation on office equipment

c. Advertising expenses

f. Repairs and maintenance costs for sewing machines

g. Salary of production quality control supervisor

h. Utility costs for office building

i. Sales commissions

j. Salaries of distribution center personnel

k. Wages of sewing machine operators

l. Factory janitorial supplies

m. Chief financial officer’s salary

n. Travel costs of media relations employees

o. Factory supervisors’ salaries

p. Oil used to lubricate sewing machines

q. Property taxes on factory building and equipment

(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 classify: Each of the following costs as either a product cost or a period cost for apparel manufacturer Incorporation A&F.

Explanation

Cost of information technology support for the corporate headquarters is the period cost.

The cost of information technology support for the corpor...

b.

To determine

To classify: Each of the following costs as either a product cost or a period cost for apparel manufacturer Incorporation A&F.

c.

To determine

To classify: Each of the following costs as either a product cost or a period cost for apparel manufacturer Incorporation A&F.

d.

To determine

To classify: Each of the following costs as either a product cost or a period cost for apparel manufacturer Incorporation A&F.

e.

To determine

To classify: Each of the following costs as either a product cost or a period cost for apparel manufacturer Incorporation A&F.

f.

To determine

To classify: Each of the following costs as either a product cost or a period cost for apparel manufacturer Incorporation A&F.

g.

To determine

To classify: Each of the following costs as either a product cost or a period cost for apparel manufacturer Incorporation A&F.

h.

To determine

To classify: Each of the following costs as either a product cost or a period cost for apparel manufacturer Incorporation A&F.

i.

To determine

To classify: Each of the following costs as either a product cost or a period cost for apparel manufacturer Incorporation A&F.

j.

To determine

To classify: Each of the following costs as either a product cost or a period cost for apparel manufacturer Incorporation A&F.

k.

To determine

To classify: Each of the following costs as either a product cost or a period cost for apparel manufacturer Incorporation A&F.

l.

To determine

To classify: Each of the following costs as either a product cost or a period cost for apparel manufacturer Incorporation A&F.

m.

To determine

To classify: Each of the following costs as either a product cost or a period cost for apparel manufacturer Incorporation A&F.

n.

To determine

To classify: Each of the following costs as either a product cost or a period cost for apparel manufacturer Incorporation A&F.

o.

To determine

To classify: Each of the following costs as either a product cost or a period cost for apparel manufacturer Incorporation A&F.

p.

To determine

To classify: Each of the following costs as either a product cost or a period cost for apparel manufacturer Incorporation A&F.

q.

To determine

To classify: Each of the following costs as either a product cost or a period cost for apparel manufacturer Incorporation A&F.

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