Using the costs listed in the previous problem, classify the costs as either product costs or period costs.

Data from PROBLEMS SETS B 5:

Pocket Umbrella, Inc, is considering producing a new type of umbrella. This new pocket-sized umbrella would fit into a coat pocket or purse. Classify the following costs of this new product as direct materials, direct labor, manufacturing overhead, or selling and administrative.[6]

A. Cost of advertising the product

B. Fabric used to make the umbrellas

C. Maintenance of cutting machines used to cut the umbrella fabric so it will fit the umbrella frame

D. Wages of workers who assemble the product

E. President’s salary

F. The salary of the supervisor of the people who assemble the product

G. Wages of the product tester who stands in a shower to make sure the umbrellas do not leak

H. Cost of market research survey

I. Salary of the company’s sales managers

J. Depreciation of administrative office building