5.

For each item shown below, classify it as a product cost or a period cost, by placing an X in the appropriate column. For each item that is a product cost, also indicate whether it is a direct cost or an indirect cost with respect to a unit of finished product. Hint: Direct or indirect costs will not apply to items that you have classified as period cost, as period cost are not associated with producing the companys finished products. I have completed the first item for you. (4 points)

	Product or period cost?		Direct or indirect cost?
Cost item	Product	Period	Direct	Indirect
Administrative salaries		X
Direct labor
Advertising
Property tax on the factory
Factory maintenance
Direct materials
Depreciation on factory equipment
Interest expense
Factory supplies