Part 1. Assume were operating a company that produces and sells baked goods to retail outlets. The companys infrastructure consists of a leased factory (production) facility where all of the baking is done, and there are sales and administrative offices located in a separate building leased at another location. Identify whether each of the following expense items for this company would be categorized as a PRODUCT COST or a PERIOD COST by placing an X in the appropriate box for each item. Note that each type of expense is either a product cost or a period cost, but not both. The first item has already been completed for you.

Expense Item	PRODUCT COST	PERIOD COST
Factory insurance	X
Company presidents salary
Bakers wages
Depreciation expense on bake ovens
Factory utilities
Factory lease
Advertising costs
Factory supervisors salaries
Sales commissions
Flour used in baking bread