Question

The following calendar year-end information is taken from the December 31, 2017, adjusted trial balance and other records of Leone Company.

Advertising expense $ 34,000

Depreciation expense—Office equipment 10,000

Depreciation expense—Selling equipment 9,300 Depreciation expense—Factory equipment

35,550 Factory supervision 105,360

Factory supplies used 7,850

Factory utilities 39,000

Direct labor 750,000

Indirect labor 67,800

Miscellaneous production costs 9,775

Office salaries expense 67,400

Raw materials purchases* 952,500

Rent expense—Office space 28,400

Rent expense—Selling space 26,100

Rent expense—Factory building 78,800

Maintenance expense—Factory equipment 42,600

Sales 4,762,500 Sales salaries expense 406,160

*Assume that the raw materials inventory account is used only for direct materials. Indirect materials are recorded in a factory supplies account. Required: Classify each of the costs as either a product or period cost. Then, classify each of the product costs as either direct materials, direct labor, or factory overhead and each of the period costs as either selling or general and administrative expenses. (Leave no cell blank.)

Answer 1

					Product/	DM/DL/		Selling/
Items of Cost					Period	factory Oh		Gen. and admin oh
Advertisment expenses					Period	NA		Selling Oh
Depreciation expense-office equipment					Period	NA		Gen and Admin Oh
Depreciation expenses-Selling equipment					period	NA		Selling Oh
Depreciation expennses-factory equipment					Product	factory Oh		NA
factory supervision					Product	factory Oh		NA
factory supplies					Product	factory Oh		NA
factory Utilities					Product	factory Oh		NA
Direct Labour					Product	Direct labor		NA
Indirect labour					Product	factory Oh		NA
Misc. production cost					Product	factory Oh		NA
Office salaries expenses					Period	NA		Gen and Admin Oh
Raw material Purchase					Product	Direct Material		NA
Rent expenses-Office space					Period	NA		Gen and Admin Oh
Rent expenses-selling space					Period	NA		Selling Oh
Rent expenses-factory building					Product	factory Oh		NA
maintenance expenses-factory equipment					Product	factory Oh		NA
Sales salaries expenses					Period	NA		Selling Oh