Product costs: Product costs are the costs which are incurred in the production of the goods. These costs include the direct materials cost, direct labor cost, and factory overhead cost. Period costs: Period costs are the costs other than the product costs. These costs are not incurred in manufacturing the goods. These costs include the administrative expenses, and selling expenses. To classify: Each of the costs as either a product cost or a period cost, and to indicate whether it is a direct material cost, direct labor cost, or a factory overhead cost if it is product cost, and whether it is a selling expense, or administrative expense if it is period cost.

Question

The following is a list of costs that were incurred in the production and sale of lawn mowers:a. Premiums on insurance policy for factory buildingsb. Tires for lawn mowersc. Filter for spray gun used to paint the lawn mowersd. Paint used to coat the lawn mowers, the cost of which is immaterial to the cost of the final producte. Plastic for outside housing of lawn mowersf. Salary of factory supervisorg. Hourly wages of operators of robotic machinery used in productionh. Engine oil used in mower engines prior to shipmenti. Salary of vice president of marketingj. Property taxes on the factory building and equipmentk. Cost of advertising in a national magazinel. Gasoline engines installed in the lawn mowersm. Electricity used to run the robotic machineryn. Straight-line depreciation on the robotic machinery used to manufacture the lawn mowerso. Salary of quality control supervisor who inspects each lawn mower before it is shippedp. Attorney fees for drafting a new lease for headquarters…

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Chapter 16, Problem 16.1BPR

To determine

Product costs:

Product costs are the costs which are incurred in the production of the goods. These costs include the direct materials cost, direct labor cost, and factory overhead cost.

Period costs:

Period costs are the costs other than the product costs. These costs are not incurred in manufacturing the goods. These costs include the administrative expenses, and selling expenses.

To classify: Each of the costs as either a product cost or a period cost, and to indicate whether it is a direct material cost, direct labor cost, or a factory overhead cost if it is product cost, and whether it is a selling expense, or administrative expense if it is period cost.

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The following is a list of costs that were incurred in the production and sale of lawn mowers:a. Premiums on insurance policy for factory buildingsb. Tires for lawn mowersc. Filter for spray gun used to paint the lawn mowersd. Paint used to coat the lawn mowers, the cost of which is immaterial to the cost of the final producte. Plastic for outside housing of lawn mowersf. Salary of factory supervisorg. Hourly wages of operators of robotic machinery used in productionh. Engine oil used in mower engines prior to shipmenti. Salary of vice president of marketingj. Property taxes on the factory building and equipmentk. Cost of advertising in a national magazinel. Gasoline engines installed in the lawn mowersm. Electricity used to run the robotic machineryn. Straight-line depreciation on the robotic machinery used to manufacture the lawn mowerso. Salary of quality control supervisor who inspects each lawn mower before it is shippedp. Attorney fees for drafting a new lease for headquarters…

Identify the following costs as direct materials, direct labor, or factory overhead for a lawn mower

Classifying period costs and product costs Langley, Inc. is the manufacturer of lawn care equipment. The company incurs the following costs while manufacturing edgers: Handle and shaft of edger Motor of edger Factory labor for workers assembling edgers Lubricant used on bearings in the edger (not traced to the product) Glue to hold the housing together Plant janitorial wages Depreciation on factory equipment Rent on plant Sales commissions Administrative salaries Plant utilities Shipping costs to deliver finished edgers to customers Requirements Describe the difference between period costs and product costs. Classify Langley’s costs as period costs or product costs. If the costs are product costs, further classify them as direct materials, direct labor, or manufacturing overhead.