Exercise 186 Cost classification C3 Georgia Pacific a manufa

Exercise 18-6 Cost classification C3 Georgia Pacific, a manufacturer, incurs the following costs. (1) Classify each cost as either a (PROD) or period (PER) cost. If a product cost, identify it as direct materials (DM), direct labor (DL.c factory overhead (FO), and then as a prime (PR) or conversion (CONV) cost. (2) Classify each produc cost as either a direct cost (DIR) or an indirect cost (IND) using the product as the cost object. produc

Solution

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S.No.	Costs	Product or Period	Direct Material or Direct Labor or Factory Overhead	Prime or Conversion
1	Factory Utilities	Product	Factory Overhead	Conversion
2	Advertising	Period	Not Applicable	Not Applicable
3	Amortization of Patents on factory machine	Product	Factory Overhead	Conversion
4	State and federal income taxes	Period	Not Applicable	Not Applicable
5	Office Supplies Used	Period	Not Applicable	Not Applicable
6	Insurance on factory building	Product	Factory Overhead	Conversion
7	Wages to assembly Workers	Product	Direct Labor	Prime and Conversion