Question

Trak Corporation incurred the following costs while manufacturing its bicycles. Bicycle components $100,000 Advertising expense $45,000 Depreciation on plant 60,000 Property taxes on plant 14,000 Property taxes on store 7,500 Delivery expense 21,000 Labor costs of assembly-line workers 110,000 Sales commissions 35,000 Factory supplies used 13,000 Salaries paid to sales clerks 50,000

Identify each of the above costs as direct materials, direct labor, manufacturing overhead, or period costs. Bicycle components select a classification Depreciation on plant select a classification Property taxes on store select a classification Labor costs of assembly-line workers select a classification Factory supplies used select a classification Advertising expense select a classification Property taxes on plant select a classification Delivery expense select a classification Sales commissions select a classification Salaries paid to sales clerks

Answer 1

Bicycle components $100,000

Identification: Direct material

Advertising expense $45,000

Identification: Period cost

Depreciation on plant 60,000

Identification: Manufacturing overhead

Property taxes on plant 14,000

Identification: Manufacturing overhead

Property taxes on store 7,500

Identification: Period cost

Delivery expense 21,000

Identification: Period cost

Labor costs of assembly-line workers 110,000

Identification: Direct labor

Sales commissions 35,000

Identification: Period cost

Factory supplies used 13,000

Identification: Manufacturing overhead

Salaries paid to sales clerks 50,000

Identification: Period cost