Question

Classify the following as period costs or product costs: (Cost Accounting) 1. Electricity bill of factory...

Classify the following as period costs or product costs: (Cost Accounting)

1. Electricity bill of factory

2. Electricity bill of admin office

3. Plan Depreciation

4. Office Generator Depreciation

Business   Accounting   
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Answer #1

1.Electricity Bill of factory- No factorycan run without electricity, it will part of Manufacuring Overhead. It will be included in calculating the Product Cost.

2. Electricity bill of admin office- This cost is part of Administrarive Expense, it has indirect relationship with the Manufacuring, so it will be included in Period cost

3. Plan Depreciation- All Depreciation expenses related to Factory equipment will be included in Product Cost.

4. Office Generator Depreciation-  All Depreciation expenses related to Officeequipment will be included in Period Cost.

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