Question

Stone Harbor 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:

Classify each of the items above as product (inventoriable) cost or period (noninventoriable) cost for the purpose of preparing external financial statements. Additionally, Indicate if the Item qualifies as a Prime or Conversion Cost. Finally, determine if an item is defined as Peoduct is classified as Direct or Indirect Cost.

	Product	Period	Prime	Conversion	Direct	Indirect
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 mainatining 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 telephones for executives

Answer 1