The following is a list of costs incurred by several manufacturing companies: Classify each of the following costs as product cost or period cost. Indicate whether each product cost is a direct materials cost, a direct labor cost, or a factory overhead cost. Indicate whether each period cost is a selling expense or an administrative expense: Costs Classification a. Annual picnic for plant employees and their families b. Cost of fabric used by clothing manufacturer c. Cost of plastic for a toy manufacturer d. Cost of sewing machine needles used by a shirt manufacturer e. Cost of television commercials f. Depreciation of copying machines used by the Marketing Department g. Depreciation of microcomputers used in the factory to coordinate and monitor the production schedules h. Depreciation of office building i. Depreciation of robotic equipment used to assemble a product j. Electricity used to operate factory machinery k. Factory janitorial supplies l. Fees charged by collection agency on past-due customer accounts m. Fees paid to lawn service for office grounds n. Maintenance costs for factory equipment o. Oil lubricants for factory plant and equipment p. Pens, paper, and other supplies used by the Accounting Department q. Repair costs for factory equipment r. Rent for a warehouse used to store work in process and finished products s. Salary of a physical therapist who treats plant employees t. Salary of the manager of a manufacturing plant u. Telephone charges by corporate office v. Travel costs of marketing executives to annual sales meeting w. Wages of a machine operator on the production line x. Wages of production quality control personnel
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
The following is a list of costs incurred by several manufacturing companies:
Classify each of the following costs as product cost or period cost. Indicate whether each product cost is a direct materials cost, a direct labor cost, or a factory
| Costs | Classification |
| a. Annual picnic for plant employees and their families | |
| b. Cost of fabric used by clothing manufacturer | |
| c. Cost of plastic for a toy manufacturer | |
| d. Cost of sewing machine needles used by a shirt manufacturer | |
| e. Cost of television commercials | |
| f. |
|
| g. Depreciation of microcomputers used in the factory to coordinate and monitor the production schedules | |
| h. Depreciation of office building | |
| i. Depreciation of robotic equipment used to assemble a product | |
| j. Electricity used to operate factory machinery | |
| k. Factory janitorial supplies | |
| l. Fees charged by collection agency on past-due customer accounts | |
| m. Fees paid to lawn service for office grounds | |
| n. Maintenance |
|
| o. Oil lubricants for factory plant and equipment | |
| p. Pens, paper, and other supplies used by the Accounting Department | |
| q. Repair costs for factory equipment | |
| r. Rent for a warehouse used to store work in process and finished products | |
| s. Salary of a physical therapist who treats plant employees | |
| t. Salary of the manager of a manufacturing plant | |
| u. Telephone charges by corporate office | |
| v. Travel costs of marketing executives to annual sales meeting | |
| w. Wages of a machine operator on the production line | |
| x. Wages of production quality control personnel |
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