Classify Each of the Following Costs for Harrison Company as a Selling

question 31

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Classify each of the following costs for Harrison Company as a selling or general and administrative period cost or as a direct or indirect product cost by entering the dollar amount(s) in the appropriate column(s):Paid $75,000 in wages for employees who assemble the company's products.Paid sales commissions of $58,000.Paid $38,000 in salaries for factory supervisors.Paid $88,000 in salaries for executives (president and vice presidents).Recorded depreciation cost of $25,000. $13,000 was depreciation on factory equipment and $12,000 was depreciation on the company headquarters building.Paid $4,000 for various supplies that it used in the factory (oil and materials used in machine maintenance).Used $10,000 in prepaid corporate liability insurance.

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Definitions:

Split-off Point

The stage in a process at which various products become separately identifiable and their costs can be separately assigned.

Joint Products

Two or more products that are produced from a common input.

Special Order

A one-time order that is not considered part of the company’s normal ongoing business.

Opportunity Costs

The benefits a person or business foregoes by choosing one alternative over another.