Inventoriable costs versus period costs. Each of the following cost items pertains to one of the following companies: General Electric (a manufacturing-sector company), Loblaws

(a merchandising-sector company), and Excite (a service-sector company):

a. Perrier mineral water purchased by Loblaws for sale to its customers

b. Electricity used to provide lighting for assembly-line workers at a General Electric refrig¬

erator assembly plant

c. Amortization on computer equipment at Excite used to update Web site directories.

d. Electricity used to provide lighting for Loblaws store aisles

e. Amortization on computer equipment at General Electric used for quality testing of refrigerator components during the assembly process

f. Salaries of Loblaws’ marketing personnel planning local newspaper advertising campaigns g. Perrier mineral water purchased by Excite for consumption by its software engineers h. Salaries of Excite marketing personnel selling banner advertising Required I. Distinguish among manufacturing-sector, merchandising-sector, and service-sector compa¬

nies. Which ofthese have inventories of goods for sale?

2. Distinguish between inventoriable costs and period costs.

3. Classify each of the

(a) to (h) cost items as an inventoriable cost or a period cost. Explain your answers.