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:

Interval Estimate

An estimate of a population parameter that provides an interval believed to contain the value of the parameter. For the interval estimates in this chapter, it has the form: point estimate ± margin of error.

Regression Analysis

A set of statistical processes for estimating the relationships among variables, including a dependent variable and one or more independent variables.

Sales

Sales involve the exchange of goods or services for payment or currency and constitute the operations and activities involved in promoting and selling goods or services.

Price

The amount of money required to purchase a good, service, or asset.