Which accounts are classified as direct product cost?
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which of these accounts are classified as direct product cost:
advertising expense
factory insurance
cost of LED display
cost of plastic cases
salary of company accountant
wages of assembly workers
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Solution Summary
Your tutorial is 349 words and teaches you how to separate product from non-product costs and direct from indirect costs so that you can complete this work. A sentence indicates how to classify each of these.
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There are really two questions in one here.
(1) First, is the cost a product or a non-product cost.
To get this part right, answer this question: Will you have to do it anyway, even if you hire someone to make the product for you?
If John Deere Tractor hires a factory to make its tractors, will you still have selling costs? Yes. J President's salary? Yes. Raw materials? No. It will buy the tractors as finished goods, like Home Depot and Lowes. Tax accountant? Yes.
There are business costs that are not costs to make the product. ...
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