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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 Summary

The solution explains the cost classification of the given costs

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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 ...

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