1. Each of the following cost items pertains to one of these companies: Mo Electric (a manufacturing-sector company), Peterson (a merchandising-sector company), and Reign (a service-sector company).

Required:

Classify each of the cost items as a product cost or a period cost. Explain your answers. (Maximum word count: 150)

1. Jade mineral water purchased by Peterson for sale to its customers.
2. Electricity used to provide lighting for assembly-line workers at a Mo Electric refrigerator assembly plant.
3. Depreciation on Reigns computer equipment used to update directories
4. Electricity used to provide lighting for Petersons store aisles.
5. Depreciation on Mo Electrics computer equipment used for quality testing of refrigerator components during the assembly process
6. Salaries of Petersons marketing personnel planning local-newspaper advertising campaigns.
7. Jade mineral water purchased by Reign for consumption by its software engineers.

Salaries of Reigns marketing personnel selling banner advertising