10. Plastic for outside housing on the lawn mowers during production. 11. Electricity used in the production of the lawn mowers. 12. Paint used to coat the lawn movers during production. 13. Wages of janitorial staff in the factory. 14. Cost of advertising in a national magazine. 15. Filter for spray gun used to paint the lawn mowers during production. 22 REQUIRED: 23 1. Classify each cost as either a product cost or a period cost. If you classify the cost 24 as a product cost, then identify whether it is a direct materials cost, direct labor cost, 25 or a manufacturing overhead cost. If you classify the cost as a period cost, then 26 identify whether it is a selling expense or administrative expense. 27 USE THE FORMAT BELOW 28 29 PRODUCA B C D E F G H K 38 8. Gasoline engines installed in the lawn mowers during production. 39 9. Telephone charges for the company's accounting department. 40 10. Plastic for outside housing on the lawn mowers during production. 41 11. Electricity used in the production of the lawn mowers. 42 12. Paint used to coat the lawn movers during production. 43 13. Wages of janitorial staff in the factory. 44 14. Cost of advertising in a national magazine. 45 15. Filter for spray gun used to paint the lawn mowers during production. 46 47 48 49 50A B C D E F G H K 38 8. Gasoline engines installed in the lawn mowers during production. 39 9. Telephone charges for the company's accounting department. 40 10. Plastic for outside housing on the lawn mowers during production. 41 11. Electricity used in the production of the lawn mowers. 42 12. Paint used to coat the lawn movers during production. 43 13. Wages of janitorial staff in the factory. 44 14. Cost of advertising in a national magazine. 45 15. Filter for spray gun used to paint the lawn mowers during production. 46 47 48 49 50le 07025ZFmessaging... 18 c. Depreciation on raw materials warehouse. Answer: Raw materials are used in the production of the product and therefore the depreciation on the raw materials warehouse is a product cost. Since depreciation is indirect in nature, and not traceable to each unit of product, it is classified as Factory Overhead. d. Income taxes on a profitable manufacturing company. Answer: Income tax expense is a separate line item on the income statement, and although it is a period cost, it is neither a Selling Expense or Administrative Expense. e. Cost of disposal of hazardous waste materials to a chemical plant. Answer: Since the hazardous waste materials are coming from the production process in the chemical plant, it is a product cost. It is indirect in nature, and not traceable to each unit of product, therefore it is classified as Factory Overhead. f. Amounts paid by a mobile home manufacturer to a subcontractor who installs plumbing in each mobile home. Answer: The cost of the plumbing in each mobile home is a material cost that is traceable to each mobile home and, therefore, it is a product cost classified as Direct Materials. g. Depreciation on sales showroom fixtures. Answer: The key word is here is sales. The depreciation on the sales showroom is a period cost classified as a Selling Expense. h. Salaries of security guards in administrative office building. Answer: the key word here is administrative. The salaries of the security guards is related to the administration or operation of the company, and is therefore is a period cost classified as an Administrative Expense. i. Salaries of factory security guards. Answer: The key word here is factory. The security guards are working in the factory and therefore the cost of their salary is a product cost. Because of the indirect nature of the security guards' salaries (the salaries cannot be traced into each unit of product), the security guards' salaries are indirect labor and therefore classified as Factory Overhead. Thank you, Professor RibezzoPaste B I U Dab v Vv Av Merge & Center Formatting v Table Undo Clipboard Font Alignment Number Styles Analysis A1 X V fx DISCUSSION BOARD PROBLEM - CHAPTER M1 A B C D E F G H K M N O P Q 29 PRODUCT Direct Direct Manufacturing PERIOD Selling Administrative 30 COST Materials Labor Overhead COST Expense Expense 31 1. Salary of factory supervisor. 32 2. Steel used in producing the lawn mowers. 33 3. Commissions paid to lawn mower sales representatives. 34 4. Tires installed on the lawn mowers during production. 35 5. Property taxes on the factory building and equipment. 36 6. Hourly wages of operators of machinery used in producing the lawn mowers. 37 7. Salary of vice-president of marketing. 38 8. Gasoline engines installed in the lawn mowers during production. 39 9. Telephone charges for the company's accounting department. 40 10. Plastic for outside housing on the lawn mowers during production. 41 11. Electricity used in the production of the lawn mowers. 42 12. Paint used to coat the lawn movers during production. 43 13. Wages of janitorial staff in the factory.INSTRUCTIONS Use the information in the attached assignment to classify each cost as a product cost or a period cost. If classified as a product cost, then sub-classify it as a direct materials cost, direct labor cost, or a manufacturing overhead cost. If classified as a period cost, then sub-classify it as a selling expense or administrative expense. You can copy the format illustrated in the problem. The deadline to submit the answer and attach it in the Discussion Board is Sunday, March 50. I will not accept a submission for any reason after this date. Any submission received after this date will receive zero credit. Each Discussion Board assignment is graded on a 0 to 10-point scale. The Discussion Board Assignments altogether are worth 15% of the final grade. To aid you in the completion of this assignment, see below. I am using Assignment #3 listed in the "Assignments- Problems and Solutions" on the Course's Home Page. I will give an explanation for each expenditure listed. Is it a Product Cost {Direct Materials, Direct Labor, or Factory (Manufacturing) Overhead} or a Period Cost (Selling Expense or Administrative Expense). A Selling Expense is an expenditure related to selling, promoting, or distributing the product of a company. An Administrative Expense is an expenditure related to managing or operating the company. The answers are in bold letters. a. Property taxes on factory building. Answer: any expenditure that relates to the factory, plant, product, production, or manufacturing, is a product cost. The key word here is factory. Property taxes on the factory building is a product cost, but because of its indirect nature (it can't be traced into each unit of product) it is classified as Factory Overhead. b. Salaries of office workers in the credit department. Answer: this does not relate to the production of the product, it is a period cost. The key word is here is office where the accountants and administration work. Therefore, it is a classified as an Administrative Expense. c. Depreciation on raw materials warehouse. Answer: Raw materials are used in the production of the product and therefore the depreciation on the raw materials warehouse is a product cost. Since depreciation is indirect in nature, and not traceable to each unit of product, it is classified as Factory Overhead. d. Income taxes on a profitable manufacturing company. Answer: Income tax expense is a separate line item on the income statement, and although it is a period cost, it is neither a Selling Expense or Administrative Expense. e. Cost of disposalDISCUSSION BOARD PROBLEM - CHAPTER M1 Classifying Costs The following is a list of costs that were incurred in the production and sale of lawn mowers. 1. Salary of factory supervisor 2. Steel used in producing the lawn mowers, 3. Commissions paid to lawn mower sales representatives. 4. Tires installed on the lawn mowers during production. 5. Property taxes on the factory building and equipment. 6. Hourly wages of operators of machinery used in producing the lawn mowers. 2 7. Salary of vice-president of marketing. 8. Gasoline engines installed in the lawn mowers during production. 14 9. Telephone charges for the company's accounting department. 15/10. Plastic for outside housing on the lawn mowers during production