Question

(Classifying period and product costs, LO 5) Azilda Toy Ltd. develops, manufactures, markets, and distributes a broad range of toys and games for children, from newborns to teenagers. The principal markets for Azilda's products are Canada, the United States, and Australia, where Azilda markets and distributes both company-developed and licensed products. In addition to sales in these countries, Azilda's products are marketed in more than 50 countries worldwide. For each of the costs described below, state whether you would treat the cost as a product cost or a period cost. Explain your choices.
a. Plastic, wood, metal, and other materials that are used to produce toys.
b. Commissions paid to salespeople who sell toys to distributors and retailers.
c. Salaries paid to head office staff and senior executives.
d. Electricity and other utilities used in the manufacturing plant.
e. Depreciation of equipment used to manufacture toys.
f. Amounts paid to trucking companies for delivering toys to customers.
g. Cost of designing new toys.
h. Cost of packaging for toys.
i. Television and print advertising to promote the entire line of Azilda Toy Ltd.'s toys.



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  • CreatedFebruary 26, 2015
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