Research Assignment Identifying product costs at Snap-on, Inc.
Use the 2008 Form 10-K for Snap-on, Inc., to complete the requirements below. To obtain the Form 10-K you can use the EDGAR system following the instructions in Appendix A, or it can be found under “Corporate Information” on the company’s corporate website: www.snapon.com. Read carefully the following portions of the document.
■ “Products and Services” on page 5.
■ “Consolidated Statement of Earnings” on page 55.
■ The following parts of Note 1 on page 60:
• “Shipping and handling”
• “Advertising and promotion”
■ “Note 4: Inventories” on page 66.
Required
a.Does the level of detail that Snap-on provides regarding costs incurred to manufacture its products suggest the company’s financial statements are designed primarily to meet the needs of external or internal users?
b.Does Snap-on treat shipping and handling costs as product or nonproduct costs?
c.Does Snap-on treat advertising and promotion costs as product or nonproduct costs?
d.In Chapter 3 you learned about a class of inventory called merchandise inventory. What categories of inventory does Snap-on report in its annual report?
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