Use the 2006 Form 10-K for Snap-on, Inc., to complete the requirements below. To obtain the Form 10-K you can use the EDGAR system following the instructions in Appendix A. Read carefully the following portions of the document.

■ “Products and Services” on page 5.

■ “Consolidated Statement of Earnings” on page 51.

■ The following parts of Note 1 on page 56:

■ “Shipping and handling”

■ “Advertising and promotion”

■ “Note 4: Inventories” on page 61.

■ “Note 5: Property and Equipment” on page 62.

Required

a. Does the level of detail that Snap-on provides regarding costs incurred to manufacture its products suggest the company’s financial statements are designed primarily to meet the needs of external or internal users?

b. Does Snap-on treat shipping and handling costs as product or nonproduct costs?

c. Does Snap-on treat advertising and promotion costs as product or nonproduct costs?

d. In Chapter 3 you learned about a class of inventory called merchandise inventory. What categories of inventory does Snap-on report in its annual report?