Cost Classification
Loring Company incurred the following costs last year:
Direct materials $ 216,000
Factory rent 24,000
Direct labor 120,000
Factory utilities 6,300
Supervision in the factory 50,000
Indirect labor in the factory 30,000
Depreciation on factory equipment 9,000
Sales commissions 27,000
Sales salaries $ 65,000
Advertising 37,000
Depreciation on the headquarters
building 10,000
Salary of the corporate receptionist 30,000
Other administrative costs 175,000
Salary of the factory receptionist 28,000
Required:
1. Classify each of the costs using the following table format. Be sure to total the amounts in
each column. Example: Direct materials, $216,000.
Product Cost Period Cost
Costs
Direct
Materials
Direct
Labor
Manufacturing
Overhead
Selling
Expense
Administrative
Expense
Direct materials $216,000
2. What was the total product cost for last year?
3. What was the total period cost for last year?
4. If 30,000 units were produced last year, what was the unit product cost?