Classify each of the cost items

$($A$-$I$)$

as an inventoriable cost or a period cost. Explain your answers.

a$.$ Lumber at Home Depot is $$a$($n$)$

inventoriable cost

since the lumber is

an asset $($inventory$)$ held to sale to customers.

The cost of lumber becomes part of

cost of goods sold

when it is sold to customers.

Part $4$

b$.$ Electricity in an Apple manufacturing plant is$$ a$($n$)$

period cost

$.$

It is

an indirect cost

of the product being produced.

Part $5$

c$.$ Depreciation on the shelving at Home Depot is$$ a$($n$)$

period cost

$.$

It is

a cost of selling their products

$,$

not

a cost of the products

$.$

Part $6$

d$.$ Mileage for Rent a Nanny is$$ a$($n$)$

period cost

since

it is a cost of services provided.

Part $7$

e$.$ Wages for quality testing for Apple products during production is$$ a$($n$)$

$$

$$

$.$

It is

$$

$$

a cost of producing the product

a cost of selling their product

$,$

not

$$

$$

a cost of producing the product

a cost of selling their product

$.$

Part $8$

f$.$ Salaries of the advertising personnel for Rent a Nanny is$$ a$($n$)$

$$

$$

inventoriable cost

period cost

since

$$

$$

it has no inventory.

it is a cost of services provided.

Part $9$

g$.$ Lunches provided by Rent a Nanny is$$ a$($n$)$

$$

$$

inventoriable cost

period cost

since

$$

$$

it has no inventory.

it is a cost of services provided.

Part $10$

h$.$ Wages of the employees at Home Depot is$$ a$($n$)$

$$

$$

inventoriable cost

period cost

since it is

$$

$$

an asset $($inventory$)$ held to sale to customers.

presumed not to benefit future periods.

Part $11$

i$.$ Shipping costs for Apple to send products to retail stores is$$ a$($n$)$

$$

$$

inventoriable cost

period cost

$.$

It is

$$

$$

a cost of selling the product

a cost of making the product

$,$

not

$$

$$

a cost of selling the product

a cost of making the product

$.$

Distinguish between manufacturing$-,$ merchandising$-,$ and service$-$ companies.companies provide services or intangible products to their customersfor example, legal advice or audits.companies provide services or intangible products to their customersfor example, legal advice or audits.companies purchase materials and components and convert them into different finished goods.companies purchase materials and components and convert them into different finished goods.companies purchase and then sell tangible products without changing their basic form.Select whether each statement is explaining an inventoriable cost or a period cost.are all costs in the income statement other than cost of goods sold.are all costs in the income statement other than cost of goods sold.are all costs of a product that are regarded as an asset when they are incurred and then become cost of goods sold when the product is sold.are all costs of a product that are regarded as an asset when they are incurred and then become cost of goods sold when the product is sold.for a manufacturing company are included in work$-$in$-$process and finished goods inventory $($they are "inventoried"$)$ to build up the costs of creating these assets.for a manufacturing company are included in work$-$in$-$process and finished goods inventory $($they are "inventoried"$)$ to build up the costs of creating these assets.are treated as expenses at the time they are incurred because they are presumed not to benefit future periods $($or because there is not sufficient evidence to conclude that such benefit exists$).$Lumber at Home Depot is a$($n$)$since the lumber issince the lumber isThe cost of lumber becomes part ofThe cost of lumber becomes part ofwhen it is sold to customers.Electricity in an Apple manufacturing plant is a$($n$).$ It isIt isof the product being produced.Depreciation on the shelving at Home Depot is a$($n$).$ It isIt is$,$ not, not.Mileage for Rent a Nanny is a$($n$)$sincesinceWages for quality testing for Apple products during production is a$($n$).$ It isIt is$,$ not, not.Salaries of the advertising personnel for Rent a Nanny is a$($n$)$sincesinceLunches provided by Rent a Nanny is a$($n$)$sincesinceWages of the employees at Home Depot is a$($n$)$since it issince it isShipping costs for Apple to send products to retail stores is a$($n$).$ It isIt is$,$ not, not.