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Place an "X" in the appropriate column above to classify each of the costs as a period cost of product cost Total purchases of materials Deather, rubber, and other supplies) $219.600 Marketing and advertising cost Salaries and wages for sales office staff, and executives Utility costs for the factory Commissions to the salespeople Depreciation of factory and eqment Factory supervisor salaries Wages for factory workers Insurance on the factory Research and development Amount Product cost Save for Later 32,900 147.100 9,700 12,400 27,100 65.000 226,000 15.800 21,800 > Period cost Attempts: 0 of 1 used Submit Armwr

Place an "X" in the appropriate column above to classify each of the costs as a period cost of product cost Total purchases of materials Deather, rubber, and other supplies) $219.600 Marketing and advertising cost Salaries and wages for sales office staff, and executives Utility costs for the factory Commissions to the salespeople Depreciation of factory and eqment Factory supervisor salaries Wages for factory workers Insurance on the factory Research and development Amount Product cost Save for Later 32,900 147.100 9,700 12,400 27,100 65.000 226,000 15.800 21,800 > Period cost Attempts: 0 of 1 used Submit Armwr

FINANCIAL ACCOUNTING
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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### Analyzing Cost Transactions at Kingbird Co. Lynn was reviewing the operating performance of Kingbird Co., a shoe manufacturer. She marveled at the numbers when she determined the company generated positive operating income of $261,100 last year, even after recognizing so many costs! In reviewing the many cost transactions, here is what she found: #### Expense Breakdown - **Total purchases of materials (leather, rubber, and other supplies):** $219,600 - **Marketing and advertising cost:** $32,900 - **Salaries and wages for sales, office staff, and executives:** $147,100 - **Utility costs for the factory:** $9,700 - **Commissions to the salespeople:** $12,400 - **Depreciation of factory and equipment:** $27,300 - **Factory supervisor salaries:** $65,000 - **Wages for factory workers:** $226,000 - **Insurance on the factory:** $15,800 - **Research and development:** $23,800 #### Inventory Analysis In addition, there were inventories on the balance sheet at the beginning and end of the year, both of which factored into the overall cost analysis, as follows: | Inventory Type | Beginning | End | |--------------------|-----------|---------| | RM Inventory | $39,600 | $21,300 | | WIP Inventory | $27,700 | $17,800 | | FG Inventory | $22,200 | $8,800 | ### Explanation of the Data - **RM Inventory:** Raw materials inventory levels at the beginning and end of the year. - **WIP Inventory:** Work-in-progress inventory levels at the beginning and end of the year. - **FG Inventory:** Finished goods inventory levels at the beginning and end of the year. This categorical breakdown helps to understand the allocation and utilization of the resources and costs involved in maintaining the operations of Kingbird Co.
Transcribed Image Text:### Analyzing Cost Transactions at Kingbird Co. Lynn was reviewing the operating performance of Kingbird Co., a shoe manufacturer. She marveled at the numbers when she determined the company generated positive operating income of $261,100 last year, even after recognizing so many costs! In reviewing the many cost transactions, here is what she found: #### Expense Breakdown - **Total purchases of materials (leather, rubber, and other supplies):** $219,600 - **Marketing and advertising cost:** $32,900 - **Salaries and wages for sales, office staff, and executives:** $147,100 - **Utility costs for the factory:** $9,700 - **Commissions to the salespeople:** $12,400 - **Depreciation of factory and equipment:** $27,300 - **Factory supervisor salaries:** $65,000 - **Wages for factory workers:** $226,000 - **Insurance on the factory:** $15,800 - **Research and development:** $23,800 #### Inventory Analysis In addition, there were inventories on the balance sheet at the beginning and end of the year, both of which factored into the overall cost analysis, as follows: | Inventory Type | Beginning | End | |--------------------|-----------|---------| | RM Inventory | $39,600 | $21,300 | | WIP Inventory | $27,700 | $17,800 | | FG Inventory | $22,200 | $8,800 | ### Explanation of the Data - **RM Inventory:** Raw materials inventory levels at the beginning and end of the year. - **WIP Inventory:** Work-in-progress inventory levels at the beginning and end of the year. - **FG Inventory:** Finished goods inventory levels at the beginning and end of the year. This categorical breakdown helps to understand the allocation and utilization of the resources and costs involved in maintaining the operations of Kingbird Co.
### Classification of Costs: Period Cost vs Product Cost #### Instructions: Place an "X" in the appropriate column above to classify each of the costs as a period cost or product cost. #### Cost Classification Table: | Description | Amount | Product Cost | Period Cost | |------------------------------------------------------|------------|--------------|--------------| | Total purchases of materials (leather, rubber, and other supplies) | $219,400 | | | | Marketing and advertising cost | $32,900 | | | | Salaries and wages for sales, office staff, and executives | $147,100 | | | | Utility costs for the factory | $9,700 | | | | Commissions to the salespeople | $12,400 | | | | Depreciation of factory and equipment | $27,100 | | | | Factory supervisor salaries | $65,000 | | | | Wages for factory workers | $226,000 | | | | Insurance on the factory | $15,800 | | | | Research and Development | $23,800 | | | #### Additional Information: - **Product Cost:** These are costs that are a necessary and integral part of producing the finished product. - **Period Cost:** These are costs that are identified with a specific time period rather than with a salable product. #### Graphs and Diagrams: There are no graphs or diagrams in this content. #### Actions: - **Save for Later:** Option available to save progress - **Submit Answer:** Button available to submit the classified costs #### Attempts: - **Attempts Used:** 0 of 1 used For a deeper understanding, refer to the educational materials provided on cost classification principles. This exercise helps in differentiating between the various expenses a business incurs and categorizes them correctly for accounting and financial analysis purposes.
Transcribed Image Text:### Classification of Costs: Period Cost vs Product Cost #### Instructions: Place an "X" in the appropriate column above to classify each of the costs as a period cost or product cost. #### Cost Classification Table: | Description | Amount | Product Cost | Period Cost | |------------------------------------------------------|------------|--------------|--------------| | Total purchases of materials (leather, rubber, and other supplies) | $219,400 | | | | Marketing and advertising cost | $32,900 | | | | Salaries and wages for sales, office staff, and executives | $147,100 | | | | Utility costs for the factory | $9,700 | | | | Commissions to the salespeople | $12,400 | | | | Depreciation of factory and equipment | $27,100 | | | | Factory supervisor salaries | $65,000 | | | | Wages for factory workers | $226,000 | | | | Insurance on the factory | $15,800 | | | | Research and Development | $23,800 | | | #### Additional Information: - **Product Cost:** These are costs that are a necessary and integral part of producing the finished product. - **Period Cost:** These are costs that are identified with a specific time period rather than with a salable product. #### Graphs and Diagrams: There are no graphs or diagrams in this content. #### Actions: - **Save for Later:** Option available to save progress - **Submit Answer:** Button available to submit the classified costs #### Attempts: - **Attempts Used:** 0 of 1 used For a deeper understanding, refer to the educational materials provided on cost classification principles. This exercise helps in differentiating between the various expenses a business incurs and categorizes them correctly for accounting and financial analysis purposes.
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