Indicate whether each period cost is a selling expense or an administrative expense. Use the…

Classifying costs

The following is a list of costs incurred by several businesses:

a. Charitable contribution to United Fund.

b. Fees charged by collection agency on past-due customer accounts.

c. Maintenance costs for factory equipment.

d. Cost of fabric used by clothing manufacturer.

e. Salary of the vice president of manufacturing logistics.

f. Rent for a warehouse used to store finished products.

g. Wages of a machine operator on the production line.

h. Depreciation of tools used in production.

i. Travel costs of marketing executives to annual sales meeting.

j. Cost of sewing machine needles used by a shirt manufacturer.

k. Depreciation of microcomputers used in the factory to coordinate and monitor the production schedules.

l. Maintenance and repair costs for factory equipment.

m. Wages of production quality control personnel.

n. Depreciation of robot used to assemble a product.

o. Cost of a 30-second television commercial.

p. Pens, paper, and other supplies used by the Accounting Department in preparing various managerial reports.

q. Electricity used to operate factory machinery.

r. Factory janitorial supplies.

s. Oil lubricants for factory plant and equipment.

t. Cost of plastic for a telephone being manufactured.

u. Fees paid to lawn service for office grounds upkeep.

v. Telephone charges by president’s office.

w. Surgeon’s fee for knee replacement.

x. Depreciation of copying machines used by the Marketing Department.


Classify each of the preceding costs as a product cost or period cost. Indicate whether each product cost is a direct materials cost, a direct labor cost, or a factory overhead cost. Indicate whether each period cost is a selling expense or an administrative expense. Use the following tabular headings for preparing your answer, placing an “X” in the appropriate column.  

Product Costs

Period Costs


Direct   Materials Cost

Direct   Labor Cost

Factory   Overhead Cost

Selling   Expense

Administrative   Expense