Question

Classify each cost of a paper manufacturer as either a product cost or a period​ cost: Period cost a. Salaries of scientists studying ways to speed forest growth. Period cost b. Cost of computer software to tract WIP Inventory. ▼ c. Cost of electricity at the paper mill. Period cost d. Salaries of the company's top executives. Product cost e. Cost of chemicals to treat the paper. ▼ f. Cost of TV ads. Period cost g. Depreciation on the manufacturing plant. Product cost h. Cost to purchase wood pulp. ▼ i. Life insurance on the CEO.

Answer 1

Explanation:

The product cost is the cost that have incurred related to the product. It involves direct material cost, direct labor cost, and the manufacturing overhead account

And, the period cost is the cost which includes the major part of the selling and administrative expenses and is incurred as the time passes

So, the categorization is shown below:

a. Salaries of scientists studying ways to speed forest growth. = Period cost

b. Cost of computer software to track WIP Inventory. = Product cost

c. Cost of electricity at the paper mill. = Product cost

d. Salaries of the company’s top executives. =  Period cost

e. Cost of chemicals to treat the paper. = Product cost

f. Cost of TV ads. = Period cost

g. Depreciation on the manufacturing plant. = Product cost

h. Cost to purchase wood pulp.=  Product cost

i. Life insurance on the CEO. =  Period cost