Contemporary Engineering Economics 6th Edition by Chan Park

Exercise 1

Classifying Costs
Identify which of the following transactions and events are product costs and which are period costs:
• Storage and material handling costs for raw materials.
• Gains or losses on the disposal of factory equipment.
• Lubricants for machinery and equipment used in production
• Depreciation of a factory building.
• Depreciation of manufacturing equipment.
• Depreciation of the company president's automobile.
• Leasehold costs for land on which factory buildings stand.
• Inspection costs of finished goods.
• Direct labour cost.
• Raw-materials cost.
• Advertising expenses.