Product and Period Costs:
Loring Company incurred the following costs last year:
Direct materials $216,000
Direct labor 120,000
Supervision in the factory 50,000
Depreciation on factory equipment 9,000
Sales salaries 65,000
Depreciation on the headquarters building 10,000
Other administrative costs 175,000
Factory rent 24,000
Factory utilities 6,300
Indirect labor in the factory 30,000
Sales commissions 27,000
Advertising 37,000
Salary of the corporate receptionist 30,000
Salary of the factory receptionist 28,000
Required
1. Classify each of the above costs using the table format given below. Be sure to total the
amounts in each column.
Example: Direct materials $216,000
Product Cost Period Cost
Direct Materials Direct Labor Overhead Selling Expense Administrative Expense
Costs
Direct
materials
$216,000
2. What was the total product cost for last year?
3. What was the total period cost for last year?
4. If 30,000 units were produced last year, what was the unit product cost?
