Manufacturer’s costs are either inventoriable product costs or period costs.
Requirement
1. Classify each of a paper manufacturer’s costs as either an inventoriable product cost or a period cost:
Salaries of scientists studying ways to speed forest growth.
Cost of computer software to track WIP inventory.
Cost of electricity at a paper mill.
Salaries of the company’s top executives.
Cost of chemicals to treat paper.
Cost of TV ads.
Depreciation on the gypsum board plant.
Cost of lumber to be cut into boards.
Life insurance on CEO.