Exercise 3 (Chapter 10)-Identifying product versus selling,general, and administ

Question

Exercise 3 (Chapter 10)-Identifying product versus selling,general, and administrative (SG&A;) costs Required: Indicate whether each of the following costs should be classified as a product cost or as an SG&A; cost in accordance with GAAP a. Direct materials used in a manufacturing company. b. Indirect materials used in a manufacturing company. c. Salaries of employees working in the accounting department. d. Commissions paid to sales staff. e. Interest on the mortgage for the company's corporate headquarters. f. Indirect labor used to manufacture inventory. g. Attorney's fees paid to protect the company from frivolous lawsuits. h. Research and development costs incurred to create new drugs for a pharmaceutical company. i. The cost of secretarial supplies used in a doctor's office. j. Depreciation on the office furniture of the company president.

Explanation / Answer

a) Direct materials used in a manufacturing company. product cost b) Indirect materials used in a manufacturing company. product cost c) Salaries of employees working in the accounting department. general, selling, and administrative cost d) Commissions paid to sales staff. general, selling, and administrative cost e) Interest on the mortgage for the company's corporate headquarters. general, selling, and administrative cost f) Indirect labor used to manufacture inventory. product cost g) Attorney's fees paid to protect the company from frivolous lawsuits. general, selling, and administrative cost h) Research and development costs incurred to create new drugs for a pharmaceutical company. general, selling, and administrative cost i) The cost of secretarial supplies used in a doctor's office. general, selling, and administrative cost j) Depreciation on the office furniture of the company president. general, selling, and administrative cost

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.