Chapter 3, Problem 21P

Identifying product and period costs

Required

Indicate whether each of the following costs is a product cost or a period (selling and administrative) cost:

a. Goods purchased for resale.

b. Salaries of salespersons.

c. Advertising costs.

d. Transportation-out.

e. Interest on a note payable.

f. Salary of the company president.

g. Transportation-in.

h. Insurance on the office building.

i. Office supplies.

j. Costs incurred to improve the quality of goods available for sale.