following costs relate to one month\'s activity in Martin Company: Indirect mate

Question

following costs relate to one month's activity in Martin Company:

Indirect materials $ 300
Rent on factory building 500
Maintenance of equipment 50
Direct material 1,200
Utilities on factory 250
Direct labor 1,500
Selling expense 500
Administrative expense 300
Work in process inventory, beginning 600
Work in process inventory, ending 800
Finished goods inventory, beginning 500
Finished goods inventory, ending 250
following costs relate to one month's activity in Martin Company:

Indirect materials $ 300
Rent on factory building 500
Maintenance of equipment 50
Direct material 1,200
Utilities on factory 250
Direct labor 1,500
Selling expense 500
Administrative expense 300
(a.) Write down each of the above costs for Martin Company and tell me whether it is a period cost or a product cost.

Explanation / Answer

Indirect materials: Product cost Rent on factory building: Product cost Maintenance of equipment: Product cost Direct material: Product cost Utilities on factory: Product cost Selling expense: Period cost Administrative expense: Period cost

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