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    Classifying Cost

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    Use the following format to classify each cost as a product cost or a general, selling, and administrative (G,S,A) cost. Also indicate whether the cost would be recorded as an asset or an expense. The first is shown as an example.

    Cost Category Product, G, S, & A Asset/Expense

    Wages or production workers Product Asset
    Advertising costs
    Promotion Costs
    Production Supplies
    Depreciation on administrative building
    Depreciation on manufacturing equipment
    Research and development costs
    Cost to set up manufacturing equipment
    Utilities used in factory
    Cost for sales staff
    Distributions to stockholders
    General office supplies
    Raw materials used in the manufacturing process
    Cost to rent office space

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    Solution Preview

    Manufacturing costs are product costs and other costs are period costs of GSA costs. Product costs are inventoriable and so are asset and other costs are expensed.

    Advertising costs GS&A / Expense
    Promotion Costs GS&A / Expense
    Production Supplies ...

    Solution Summary

    The solution explains the cost classification of the given costs

    $2.19

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