A product cost is also known as an inventoriable cost.
Required:
Classify the following costs as either product (inventoriable) costs or period (non-inventoriable) costs in a manufacturing company:
1. Depreciation on salespeople’s cars.
2. Rent on equipment used in the factory.
3. Lubricants used for maintenance of factory equipment.
4. Salaries of finished goods warehouse personnel.
5. Soap and paper towels used by factory workers.
6. Sales supervisors’ salaries.
7. Property taxes on the factory building.
8. Materials used in boxing units of finished product for shipment overseas. (Units are not normally boxed.)
9. Advertising outlays.
10. Workers’ compensation insurance on factory employees.
11. Depreciation on chairs and tables in the administrative boardroom.
12. Salary of the production quality supervisor for the company.
13. Depreciation on a Learjet used by the company’s executives.
14. Rent on rooms at a Florida resort for a manufacturing conference.
15. Attractively designed box for packaging breakfast cereal.