Trak Corporation incurred the following costs while manufacturing its bicycles.

Instructions

(a) Identify each of the above costs as direct materials, direct labor, manufacturing over-head, or period costs.

(b) Explain the basic difference in accounting for product costs and period costs.

Transcribed Image Text:

Bicycle components Depreciation on plant Property taxes on st Labor costs of assembly-line wkers 110,000 Sales commissions Factory supplies used $45,000 14,000 21,000 35,000 50,000 $100,000 Advertising expense 60,000 Property taxes on plant 7,500 Delivery expense ore 13,000 Salaries paid to sales clerks