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Everything Umbrella Inc. is considering producing a new type of umbrella. This new pocket-sized umbrella would fit into a coat pocket or purse.
Prepare a table with three columns to include the following information:
Classify the costs of this new product as direct materials, direct labor, manufacturing overhead, selling, or administrative.
Classify the costs listed as either product costs or period costs.
List of expenses incurred by Everything Umbrella Inc.
Cost of advertising the product.
Fabric used to make the umbrellas.
Maintenance of cutting machines used to cut the umbrella fabric so it will fit the umbrella frame.
Wages of workers who assemble the product.
The salary of the supervisor of the people who assemble the product.
Wages of the product tester who stands in a shower to make sure the umbrellas do not leak.
Cost of market research survey.
Salary of the company’s sales managers.
Depreciation of administrative office building.
The table should be easy to read and nicely formatted with adequate explanations. Here is an example of the first two lines of a table.
Expense item DM/DL/OH/Sell./Adm. Product/Period
Advertising Selling expense Period cost