The following calendar year-end information is taken from the December 31, 2017,

Question

The following calendar year-end information is taken from the December 31, 2017, adjusted trial balance and other records of Leone Company.

*Assume that the raw materials inventory account is used only for direct materials. Indirect materials are recorded in a factory supplies account.

Required:
Classify each of the costs as either a product or period cost. Then, classify each of the product costs as either direct materials, direct labor, or factory overhead and each of the period costs as either selling or general and administrative expenses. (Leave no cell blank.)

Advertising expense $ 29,500 Depreciation expense—Office equipment 8,250 Depreciation expense—Selling equipment 10,900 Depreciation expense—Factory equipment 38,150 Factory supervision 104,460 Factory supplies used 11,350 Factory utilities 35,700 Direct labor 708,000 Indirect labor 64,800 Miscellaneous production costs 8,875 Office salaries expense 67,950 Raw materials purchases* 985,000 Rent expense—Office space 23,800 Rent expense—Selling space 27,000 Rent expense—Factory building 79,600 Maintenance expense—Factory equipment 39,000 Sales 4,512,500 Sales salaries expense 409,360

Explanation / Answer

Advertising expense period cost Selling Depreciation expense - office equipment period cost Administrative Depreciation expense - selling equipment period cost Selling Depreciation expense - factory equipment Product cost factory overheads factory supervision Product cost factory overheads Factory supplies used Product cost factory overheads Factory utilities Product cost factory overheads Direct labor Product cost direct labor Indirect labor Product cost factory overheads Misc. production costs Product cost factory overheads Office salaries expense period cost Administrative Raw material purchase Product cost direct material Rent expense - office space period cost Administrative Rent expense - selling space period cost Selling Rent expense - Factory building Product cost factory overheads Maintenance expense- factory equipment Product cost factory overheads Sales Sales salaries expense period cost Selling

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