Question

Blockett Company makes automobile sunshades and incurs the costs listed in the table below. Required For each of the following costs, choose "Yes" to indicate if the cost is a period or category of product cost and whether it is a prime cost, conversion cost, or both. (Select 'No' in the inappropriate cells.) PRODUCT COSTS PeriodDirect Direct Manufacturing Prime Conversion Cost Materials Labor Overhead Cost Cost Company president's salary Factory rent Cost of reflective material Wages of material cutter Wages of office receptionist Thread and glue Depreciation for salesperson's car Factory supervisor's salary Factory utilities Factory insurance

Answer 1

	Product costs are incurred to acquire the products while period cost associated with passage of time
	Prime cost=Direct materials+Direct labor
	Conversion cost=Direct labor+Manufacturing overhead
						Product costs
					Period cost	Direct materials	Direct labor	Manufacturing overhead	Prime cost	Coversion cost
	Company president's salary				Yes	No	No	No	No	No
	Factory rent				No	No	No	Yes	No	Yes
	Cost of reflective material				No	Yes	No	No	Yes	No
	Wages of material cutler				No	No	Yes	No	Yes	Yes
	Wages of office receptionist				Yes	No	No	No	No	No
	Thread and glue				No	No	No	Yes	No	Yes
	Depreciation for salesperson's car				Yes	No	No	No	No	No
	Factory supervisor's salary				No	No	No	Yes	No	Yes
	Factory utilities				No	No	No	Yes	No	Yes
	Factory insurance				No	No	No	Yes	No	Yes