Consider the Following Cost Items

Essay

Consider the following cost items:
1. Sales commissions earned by a company's sales force.
2. Raw materials purchased during the period.
3. Current year's depreciation on a firm's manufacturing facilities.
4. Year-end completed production of a carpet manufacturer.
5. The cost of products sold to customers of an apparel store.
6. Wages earned by machine operators in a manufacturing plant.
7. Income taxes incurred by an airline.
8. Marketing costs of an electronics manufacturer.
9. Indirect labour costs incurred by a manufacturer of office equipment.
Required:
Required:
A. Evaluate the costs just cited and determine whether the associated dollar amounts would be found on the firm's balance sheet, income statement, or schedule of cost of goods manufactured. (Note: In some cases, more than one answer will apply.)
B. What major asset will normally be insignificant for service enterprises and relatively substantial for retailers, wholesalers, and manufacturers? Briefly discuss.
C. Briefly explain the similarity and difference between the merchandise inventory of a retailer and the finished-goods inventory of a manufacturer.