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PR 1-2A Classifying costs OBJ. 2 The following is a list of costs incurred by several businesses: a. Cost of fabric used by clothing manufacturer

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PR 1-2A Classifying costs OBJ. 2 The following is a list of costs incurred by several businesses: a. Cost of fabric used by clothing manufacturer b. Maintenance and repair costs for factory equipment c. Rent for a warehouse used to store work in process and finished products d. Wages of production quality control personnel e. Oil lubricants for factory plant and equipment f. Depreciation of robot used to assemble a product g. Travel costs of marketing executives to annual sales meeting h. Depreciation of copying machines used by the Marketing Department i. Fees charged by collection agency on past-due customer accounts 1. Electricity used to operate factory machinery k. Maintenance costs for factory equipment 1. Pens, paper, and other supplies used by the Accounting Department in preparing various managerial reports m. Charitable contribution to United Fund n. Depreciation of microcomputers used in the factory to coordinate and monitor the production schedules 0. Fees paid to lawn service for office grounds upkeep (Continued) 30 Chapter 1 Managerial Accounting Concepts and Principles p. Cost of sewing machine needles used by a shirt manufacturer 4. Cost of plastic for a telephone being manufactured r. Telephone charges by president's office s. Cost of 30-second television commercial t. Surgeon's fee for heart bypass surgery u. Depreciation of tools used in production v. Wages of a machine operator on the production line w. Salary of the vice president of manufacturing operations X Factory janitorial supplies Instructions Classify each of the preceding costs as a product cost or period cost. Indicate whether each product cost is a direct materials cost, a direct labor cost, or a factory overhead cost. Indicate whether each period cost is a selling expense or an administrative expense. Use the following tabular headings for preparing your answer, placing an "X" in the ap- propriate column: Product Costs Period Costs Factory Selling Administrative Cost Cost Expense Expense Direct Materials Cost Direct Labor Overhead Cost

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