Problem

Georgia Pacific, a manufacturer, incurs the following costs. (1) Classify each cost as eit...

Georgia Pacific, a manufacturer, incurs the following costs. (1) Classify each cost as either a product or a period cost. If a product cost, identify it as a prime and/or conversion cost. (2) Classify each product cost as either a direct cost or an indirect cost using the product as the cost object.

 

Cost

Product Cost

 

Period Cost

Direct Cost

Indirect Cost

Prime

Conversion

1.

Office supplies used 

_____

_____

_____

_____

_____

2.

Bad debts expense 

_____

_____

_____

_____

_____

3.

Small tools used 

_____

_____

_____

_____

_____

4.

Factory utilities 

_____

_____

_____

_____

_____

5.

Advertising 

_____

_____

_____

_____

_____

6.

Amortization of patents on factory machine 

_____

_____

_____

_____

_____

7.

Payroll taxes for production supervisor 

_____

_____

_____

_____

_____

8.

Accident insurance on factory workers 

_____

_____

_____

_____

_____

9.

Depreciation—Factory building

_____

_____

_____

_____

_____

10.

State and federal income taxes 

_____

_____

_____

_____

_____

11.

Wages to assembly workers 

_____

_____

_____

_____

_____

12.

Direct materials used 

_____

_____

_____

_____

_____

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