### Context:This is an educational exercise aimed at helping students understand product costs and period costs in the context of a manufacturing company, Issac Aircams, which produces spy cameras for military use. The task is to classify various costs for financial statement preparation necessary for a bank loan application.### Task:Classify each cost listed below as either a product cost or a period cost:#### Costs:1. **Depreciation on salespersons’ cars.**2. **Rent on equipment used in the factory.**3. **Lubricants used for machine maintenance.**4. **Salaries of personnel who work in the finished goods warehouse.**5. **Soap and paper towels used by factory workers at the end of a shift.**6. **Factory supervisors’ salaries.**7. **Heat, water, and power consumed in the factory.**8. **Materials used for boxing products for shipment overseas.**9. **Advertising costs.**10. **Workers’ compensation insurance for factory employees.**11. **Depreciation on chairs and tables in the factory lunchroom.**12. **The wages of the receptionist in the administrative offices.**13. **Cost of leasing the corporate jet used by the company’s executives.**14. **The cost of renting rooms at a Florida resort for the annual sales conference.**15. **The cost of packaging the company’s product.**### Instructions:For each listed cost in the table, determine if it is a product cost (related directly to the production process) or a period cost (related to time, usually incurred regardless of production levels). This classification is essential for understanding how costs are recorded and reported in financial statements.

The product costs are the cost that directly or indirectly related to the production process.…

Answered: Costs Product Cost or Period Co…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Which of the following is an example of direct labor cost for a cell phone manufacturer? Oa. cost of oil lubricants for factory machinery Ob. salary of plant supervisor Oc. cost of wages of assembly worker Od. cost of phone components
Which of the following is an “indirect labor” cost? Wages paid to factory janitors and factory security guards. Salaries paid to human resources (HR) personnel. All of the listed choices are correct. Wages paid to factory employees who convert raw materials into work-in-process and finished goods. Sales salaries and commissions paid to salespeople.
Classifying Costs as Materials, Labor, or Factory Overhead Indicate whether each of the following costs of an automobile manufacturer would be classified as direct materials cost, direct labor cost, or factory overhead cost: Cost Classification a. Wheels b. Glass used in the vehicle's windshield c. Wages of assembly line worker d. V8 automobile engine e. Depreciation of robotic assembly line equipment f. Steering wheel g. Painting safety masks for employees working in the paint room h. Salary of test driver
Direction: Identify each statement whether it is true or false. Cost of general advertising is non-manufacturing cost and a direct cost. Cost of fabric used in T-shirts of T-shirt manufacturing business is a variable cost, direct material cost and a period cost. Depreciation of Sewing Machine of T-shirt manufacturing business is a fixed cost and a factory overhead cost. Assembly line worker’s wages is a controllable cost, product cost, direct labor cost and indirect cost. Sales commission is a non-manufacturing cost and uncontrollable cost. Executive office and heat and air conditioning is an administrative cost, non-manufacturing cost and non-controllable cost. Cost of electricity used in sewing department of T-shirt manufacturing business is an indirect cost, Factory overhead cost and a product cost. Depreciation of furniture of sales staff is a fixed cost, period cost and selling costs. Salary of the accountant is a non-manufacturing cost, fixed cost, period cost and…
What is the journal entry to record the cost of goods sold using a job order cost accounting system? The job was listed as finished goods but has now been sold. Group of answer choices debit finished goods, credit cost of goods sold debit finished goods, credit work in process debit cost of goods sold, credit finished goods debit work in process, credit cost of goods sold
Which of the following is NOT a period cost? Multiple Choice O Depreciation of photocopiers in the office. Salary of the accounts payable clerk Insurance on a company showroom where customers can view new products. Salary of the plant supervisor.
Required: Classify the following costs as period or traceable costs. Depreciation on office building Insurance expense for factory building Product liability insurance premium Transportation charges for raw materials Factory repairs and maintenance Rent for inventory warehouse Cost of raw materials Factory wages Salary to chief executive officer Depreciation on factory Bonus to factory workers Salary to marketing staff Administrative expenses Bad debt expense Advertising expense Research and development Warranty expense Electricity for plant
1. One of the products Al-Can Products, Inc. manufactures for their rest stops are benches. Perform the following tasks to classify and record common manufacturing costs. 2. The production of the rest stop benches requires the following costs. For each cost, determine how the cost should be classified by placing an X in the appropriate column. Wages of factory supervisor Rent of company headquarters Lumber to manufacture benches Factory property taxes Bench inspector wages Wages for the marketing manager Cleaning supplies to maintain equipment Wages of production employees Stain for the benches Direct Materials Direct Factory Labor Overhead None
Make a schedule of cost of goods manufactured.
Which of the following would most likely NOT be included as manufacturing overhead in a furniture factory? O The factory utilities of the department in which production takes place. O The salary of the supervisor who oversees production. The amount paid to the individual who stains a chair. The cost of the glue in a chair.
Indicate whether each cost is: A. Fixed or Variable b. Selling, General/Administrative, or Manufacturing
Which one of the following costs would not be inventoriable? Production electric bill Wages of forklift driver loading finished product onto delivery vans Plastic gloves worn by assembly line workers Wages of maintenance workers in a factory

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