The Following Is a List of Costs Incurred by Several

question 17

Essay

The following is a list of costs incurred by several business organizations:
a Telephone cable for a telephone company
b Membership fees for a health club for executives
c Salary of the director of internal auditing
d Long-distance telephone bill for calls made by salespersons
e Carrying cases for a manufacturer of video camcorders
f Cotton for a textile manufacturer of blue jeans
g Bandages for the emergency room of a hospital
h Cost of company holiday party
i Electricity used to operate factory machinery
j State unemployment compensation taxes for factory workers
k Gloves for factory machine operators
l Fees paid for lawn service for office grounds
m Salary of secretary to vice-president of finance
n Salary of secretary to vice-president of marketing
o Production supervisor's salary
p Engine oil for manufacturer and distributor of motorcycles
q Oil lubricants for factory plant and equipment
r Cost of a radio commercial
s Depreciation on factory equipment
t Wages of checkout clerk in company-owned retail outlet
u Maintenance and repair costs for factory equipment
v Depreciation on office equipment
w Bonuses paid to salespersons
x Insurance on factory building
y Training for accounting personnel on use of microcomputer
z Steel for a construction contractor
Classify each of the preceding costs as product costs or period costs.For those costs classified as product costs, indicate whether the product cost is a direct materials cost, direct labor cost, or factory overhead cost.For those costs classified as period costs, indicate whether the period cost is a selling expense or an administrative expense.Use the following tabular headings for preparing your answer.Place an X in the appropriate column.

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Definitions:

New Businesses

Entities that have been recently established to pursue commercial, social, or other forms of organizational goals.

State Regulation

Laws and rules established by governmental entities at the state level to control or direct the behavior of individuals, businesses, and other organizations.

Franchising

A method of distributing products or services which involves a franchisor, who establishes the brand's trademark or business system, and a franchisee, who pays a royalty to operate a business under the franchisor's name and system.

Protect Franchisees

The act of safeguarding the rights and interests of franchisees through legal, operational, or contractual measures.