Question

Stony Electronics Corporation manufactures a portable radio designed for mounting on the wall of the bathroom. The following list represents some of the different types of costs incurred in the manufacture of these radios:

1) The plant manager's salary.
2) The cost of heating the plant.
3) The cost of heating executive offices.
4) The cost of printed circuit boards used in the radios.
5) Salaries and commissions of company salespersons.
6) Depreciation on office equipment used in the executive offices.
7) Depreciation on production equipment used in the plant.
8) Wages of janitorial personnel who clean the plant.
9) The cost of insurance on the plant building.
10) The cost of electricity to light the plant.
11) The cost of electricity to power plant equipment.
12) The cost of maintaining and repairing equipment in the plant.
13) The cost of printing promotional materials for trade shows.
14) The cost of solder used in assembling the radios.
15) The cost of telephone service for the executive offices.

Required:

Classify each of the items above as product (inventoriable) cost or period (noninventoriable) costs for the purpose of preparing external financial statements.

Answer 1

Answer-

1	The plant manager's salary.	Product Cost
2	The cost of heating the plant.	Product Cost
3	The cost of heating executive offices.	Period Cost
4	The cost of printed circuit boards used in the radios.	Product Cost
5	Salaries and commissions of company salespersons.	Period Cost
6	Depreciation on office equipment used in the executive offices	Period Cost
7	Depreciation on production equipment used in the plant.	Product Cost
8	Wages of janitorial personnel who clean the plant.	Product Cost
9	The cost of insurance on the plant building.	Product Cost
10	The cost of electricity to light the plant.	Product Cost
11	The cost of electricity to power plant equipment.	Product Cost
12	The cost of maintaining and repairing equipment in the plant.	Product Cost
13	The cost of printing promotional materials for trade shows.	Period Cost
14	The cost of solder used in assembling the radios.	Product Cost
15	The cost of telephone service for the executive offices.	Period Cost