Classify Each Cost of a Furniture Manufacturer as Either Product

question 170

Essay

Classify each cost of a furniture manufacturer as either product cost (PR)or period cost (PE).
$$\begin{array} { | l | l | } \hline{ \text { Cost } } & \text { PR or PE } \\\hline \text { Vice president of marketing's salary } & \\\hline \text { Delivery expense } & \\\hline \text { Wood used to make tables } & \\\hline \text { Depreciation on office equipment } & \\\hline \text { Production supervisor's salary } & \\\hline \text { Factory insurance } & \\\hline \text { Corporate office rent } & \\\hline\end{array}$$

---

Definitions:

Insurance

A contractual agreement where one party pays premiums in exchange for a promise of compensation for specified potential future losses or damages.

Factory Overhead

All indirect costs associated with manufacturing, excluding direct labor and direct materials, such as utilities, depreciation, and maintenance of equipment.

Product Cost

The total of costs directly tied to the production of a product, including raw material, labor, and overhead.

Oil Lubricants

Substances applied to reduce friction and wear between surfaces in mutual contact, which ultimately extends the life of machinery.