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 50,000 Factory supplies used 13,000 Salaries paid to sales clerks

Answer 1

1. Direct materials 2. Manufacturing overhead 3. Period costs 4. Direct labor 5. Manufacturing overhead 6. Period cost 7. Manufacturing overhead 8. Period cost 9. Period cost 10. Manufacturing cost

Answer 2

Trak Corporation, which manufactures bicycles, incurred the following costs. Bicycle components $100,000 Advertising expense $45,000 Depreciation on factory 60,000 Property taxes on factory 14,000 Property taxes on retail store 7,500 Customer 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 (a) Identify each of the above costs as direct materials, direct labor, manufacturing overhead, or period costs. Bicycle components Direct Materials Depreciation on factory Manufacturing Overhead Property taxes on retail store Period Costs Labor costs of assembly-line workers Direct Labor Factory supplies used Manufacturing Overhead Advertising expense Period Costs Property taxes on factory Manufacturing Overhead Customer delivery expense Period Costs Sales commissions Period Costs Salaries paid to sales clerks Period Costs