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Consider the following costs that were incurred during the current year:
1. Tire costs incurred
2. Sales commissions paid to the sales force
3. Wood glue consumed in the manufacture
4. Hourly wages of refinery security guards
5. The salary of a financial vice president
6. Advertising costs
7. Straight-line depreciation on factory machinery
8. Wages of assembly-line personnel
9. Delivery costs incurred
10. Newsprint consumed in printing
11. Plant insurance costs
12. LED costs incurred in light-bulb manufacturing
Required: Evaluate each of the preceding and determine whether the cost is:
(a) a product cost or a period cost
(b) variable or fixed in terms of behavior
AND
(c) for the product costs only, whether the cost is properly classified as direct material, direct labor, or manufacturing overhead. Item 1 is done as an
example: 1. Tire costs: Product cost, variable, direct material
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Consider the following costs that were incurred during the current year:
1. Tire costs incurred
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