“Suppose that you have been given a summer job at J limited, a company that manufactures sophisticated radar sets for commercial aircraft. The company, which is privately owned, has approached a bank for a loan to help finance its tremendous growth. The bank requires financial statements before approving such a loan. You have been asked to help prepare the financial statements and were given the following list of costs: The cost of the memory chips used in a radar set. Factory heating costs. Factory equipment maintenance costs. Training costs for new administrative employees. The cost of the solder that is used in assembling the radar sets. The travel costs of the company’s salespersons. Wages and salaries of factory security personnel. The cost of air-conditioning executive offices. Wages and salaries in the department that handles billing customers. Depreciation on the equipment in the fitness room used by factory workers. Telephone expenses incurred by factory management. The costs of shipping completed radar sets to customers. The wages of the workers who assemble the radar sets. The president’s salary. Health insurance premiums for factory personnel. Required: Classify each of the cost items as a product cost or a period cost.”

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

See similar textbooks

Related questions

Question

“Suppose that you have been given a summer job at J limited, a company that manufactures sophisticated radar sets for commercial aircraft. The company, which is privately owned, has approached a bank for a loan to help finance its tremendous growth. The bank requires financial statements before approving such a loan. You have been asked to help prepare the financial statements and were given the following list of costs:
The cost of the memory chips used in a radar set.
Factory heating costs.

Factory equipment maintenance costs.

Training costs for new administrative employees.
The cost of the solder that is used in assembling the radar sets.
The travel costs of the company’s salespersons.

Wages and salaries of factory security personnel.
The cost of air-conditioning executive offices.

Wages and salaries in the department that handles billing customers.
Depreciation on the equipment in the fitness room used by factory workers.
Telephone expenses incurred by factory management.

The costs of shipping completed radar sets to customers.
The wages of the workers who assemble the radar sets.
The president’s salary.

Health insurance premiums for factory personnel.

Required:

Classify each of the cost items as a product cost or a period cost.”

Expert Solution

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, management and related others by exploring similar questions and additional content below.

Similar questions