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Business, 11.03.2020 01:24 natu2072

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Georgia Pacific, a manufacturer, incurs the following costs. (1) Classify each cost as either a product direct or indirect or a period cost. If a product cost, identify it as direct materials, direct labor, or factory overhead, and then 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 by Traceability

Period or Product

Direct material, Direct labor, or Factory Overhead

Prime or Conversion

1. Factory utilities

Product-Direct

Overhead

Conversion

2. Advertising

Period cost

3. Amortization of patents on factory machine

Product-Direct

Conversion

4. State and federal income taxes

Period cost

5. Office supplies used

Period cost

6. Insurance on factory building

Product-Indirect

Conversion

7. Wages to assembly workers

Product-Indirect

Direct labor

Prime

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