Chapters 2 Lab Exercise Solutions

Chapters 2 Lab Exercise Solutions - Ch 2 Product Costing:...

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Ch 2 – Product Costing: Manufacturing Processes, Cost Terminology, and Cost Flows SOLUTION 1. Identify (with a ) each of the following costs as being either a product or period cost. If it is a product cost, further identify is as being either Direct Material (DM), Direct Labor (DL), or Manufacturing Overhead (MOH). PRODUCT COST PERIOD COST DM DL MOH Salary of company secretary Raw materials purchased Indirect factory materials Shipping charges Salary of company president Fringe benefit costs of assembly-line workers Factory rent Factory insurance Factory depreciation Salary of factory machine operator Advertising costs Salary of factory supervisor Administrative expenses Factory equipment maintenance costs QUESTION : Why does it matter whether the cost is identified as a “product” or “period” cost? (1 – 2 sentences) Product costs attach themselves to an asset account (either RM, WIP, or FG) and are not expensed until the product is
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This note was uploaded on 11/22/2010 for the course ACC 200 taught by Professor Buckless during the Spring '08 term at N.C. State.

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Chapters 2 Lab Exercise Solutions - Ch 2 Product Costing:...

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