A product cost is also known as an inventoriable cost. Classify the following costs as either product (inventoriable) costs or period (non-inventoriable) costs in a manufacturing company.
1. Depreciation on salespersons’ cars.
2. Rent on equipment used in the factory.
3. Lubricants used for maintenance of machines.
4. Salaries of finished goods warehouse personnel.
5. Soap and paper towels used by factory workers at the end of a shift.
6. Factory supervisor’s salaries.
7. Heat, water, and power consumed in the factory.
8. Materials used for boxing products for shipment overseas. (Units are not normally boxed.)
9. Advertising costs.
10. Workers’ compensation insurance on factory employees.
11. Depreciation on chairs and tables in the factory lunchroom.
12. The wages of the receptionist in the administrative offices.
13. Lease cost of the corporate jet used by the company’s executives.
14. Rent on rooms at a Florida resort for holding of the annual sales conference.
15. Attractively designed box for packaging the company’s product-breakfast cereal.

  • CreatedMarch 15, 2011
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