Product vs Period Cost Classifications Mr. Suncat has hired you to help him determine his product costs. He has given you the following list of costs and has asked you to classify these costs using the following chart by placing an “X” under the appropriate heading: Product Costs Direct Materials Direct Labor Manufacturing Overhead Period Costs Mortgage on the Cake Shop Insurance on the Cake Shop Baking ingredients (flour, sugar, etc) Utilities for the Cake Shop Office supplies Wages for the bakers Salary for his accountant, Mrs. Suncat Depreciation on office equipment Cooking spray to grease cake pans Bakery supervisor salary Advertising costs Depreciation of the baking equipment Baking equipment repairs
Product vs Period Cost Classifications
Mr. Suncat has hired you to help him determine his product costs. He has given you the following list of costs and has asked you to classify these costs using the following chart by placing an “X” under the appropriate heading:
Product Costs
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Direct Materials |
Direct Labor |
Manufacturing |
Period Costs |
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Mortgage on the Cake Shop |
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Insurance on the Cake Shop |
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Baking ingredients (flour, sugar, etc) |
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Utilities for the Cake Shop |
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Office supplies |
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Wages for the bakers |
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Salary for his accountant, Mrs. Suncat |
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Cooking spray to grease cake pans |
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Bakery supervisor salary |
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Advertising costs |
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Depreciation of the baking equipment |
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Baking equipment repairs |
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Product costs of the goods are those specifically connected to the manufacturing of the product or service planned for sale. Period costs are the other secondary costs accrued while manufacturing.
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