Question

Question 3                                                                                                           (Total: 30 marks)

Identify if the following costs are “product” or “period” costs:

COST	Period Cost or Product Cost?
1. Television advertisements for Bailey’s products
2. Lubricants used in running bottling machines
3. Research and Development related to elimination of antibiotic residues in milk
4. Gasoline used to operate refrigerated trucks delivering finished dairy products to grocery stores
5. Company president’s annual bonus
6. Depreciation on refrigerated trucks used to collect raw milk
7. Plastic gallon containers in which milk is packaged
8. Property insurance on dairy processing plant
9. Cost of milk purchased from local dairy farmers
10. Depreciation on tablets used by sales staff
11. Depreciation on chairs and tables in the factory lunchroom.
12. The cost of packaging the company’s product.
13. The wages of the receptionist in the administrative offices.
14. Cost of leasing the corporate jet used by the company’s executives.
15. The cost of renting rooms at a BC resort for the annual conference.

Answer 1

S.No Cost Period or Product Cost Period cost Product Cost 1 Period cost Period cost 5 Period cost Product Cost 6 8 Television advertisements for Bailey's products Lubricants used in running bottling machines Research and Development related to elimination of antibiotic residues in milk Gasoline used to operate refrigerated trucks delivering finished dairy products to grocery stores Company president's annual bonus Depreciation on refrigerated trucks used to collect raw milk Plastic gallon containers in which milk is packaged Property insurance on dairy processing plant Cost of milk purchased from local dairy farmers Depreciation on tablets used by sales staff Depreciation on chairs and tables in the factory lunchroom. The cost of packaging the company's product. The wages of the receptionist in the administrative offices. Cost of leasing the corporate jet used by the company's executives. The cost of renting rooms at a BC resort for the annual conference. 9 10 Product Cost Product Cost Product Cost Period cost Product Cost Product Cost Period cost 11 12 13 Period cost Period cost