The following calendar year-end information is taken from the December 31, 2019, adjusted trial balance and other records of Leone Company. Advertising expense $ 28,750 Depreciation expense—Office equipment 7,250 Depreciation expense—Selling equipment 8,600 Depreciation expense—Factory equipment 33,550 Factory supervision 102,600 Factory supplies used (indirect materials) 7,350 Factory utilities 33,000 Direct labor 675,480 Indirect labor 56,875 Miscellaneous production costs 8,425 Office salaries expense 63,000 Raw materials purchases (direct) 925,000 Rent expense—Office space 22,000 Rent expense—Selling space 26,100 Rent expense—Factory building 76,800 Maintenance expense—Factory equipment 35,400 Sales 4,462,500 Sales salaries expense 392,560 Required: Classify each of the costs as either a product or period cost. Then, classify each of the product costs as either direct materials, direct labor, or factory overhead and each of the period costs as either selling or general and administrative expenses. (Leave no cell blank.) Costs Product Cost or Period Cost Type of Product Cost Type of Period Cost 1. Advertising expense 2. Depreciation expense—Office equipment 3. Depreciation expense—Selling equipment 4. Depreciation expense—Factory equipment 5. Factory supervision 6. Factory supplies used (indirect materials) 7. Factory utilities 8. Direct labor 9. Indirect labor 10. Miscellaneous production costs 11. Office salaries expense 12. Raw materials purchases (direct) 13. Rent expense—Office space 14. Rent expense—Selling space 15. Rent expense—Factory building 16. Maintenance expense—Factory equipment 17. Sales 18. Sales salaries expense

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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Question

The following calendar year-end information is taken from the December 31, 2019, adjusted trial balance and other records of Leone Company.


Advertising expense	$	28,750
Depreciation expense—Office equipment		7,250
Depreciation expense—Selling equipment		8,600
Depreciation expense—Factory equipment		33,550
Factory supervision		102,600
Factory supplies used (indirect materials)		7,350
Factory utilities		33,000
Direct labor		675,480
Indirect labor		56,875
Miscellaneous production costs		8,425
Office salaries expense		63,000
Raw materials purchases (direct)		925,000
Rent expense—Office space		22,000
Rent expense—Selling space		26,100
Rent expense—Factory building		76,800
Maintenance expense—Factory equipment		35,400
Sales		4,462,500
Sales salaries expense		392,560

Required:
Classify each of the costs as either a product or period cost. Then, classify each of the product costs as either direct materials, direct labor, or factory overhead and each of the period costs as either selling or general and administrative expenses. (Leave no cell blank.)

	Costs	Product Cost or Period Cost	Type of Product Cost	Type of Period Cost
1.	Advertising expense
2.	Depreciation expense—Office equipment
3.	Depreciation expense—Selling equipment
4.	Depreciation expense—Factory equipment
5.	Factory supervision
6.	Factory supplies used (indirect materials)
7.	Factory utilities
8.	Direct labor
9.	Indirect labor
10.	Miscellaneous production costs
11.	Office salaries expense
12.	Raw materials purchases (direct)
13.	Rent expense—Office space
14.	Rent expense—Selling space
15.	Rent expense—Factory building
16.	Maintenance expense—Factory equipment
17.	Sales
18.	Sales salaries expense

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