Question

Paul Stanley specializes in manufacturing motorcycle helmets. During the current period, the following costs were incurred.

For each cost, indicate whether the cost would be considered to be DM--direct material; DL--direct labor; OH--factory overhead; or PC-period cost.

1. Maintenance costs on factory building _______

2. Factory manager's salary ________

3. Advertising for helmets ________

4. Sales commissions ________

5. Depreciation on factory building ________

6. Rent on factory equipment ________

7. Insurance on factory building ________

8. Plastic used to make helmet ________

9. Utility costs for factory ________

10. Supplies for general office ________

11. Wages for assembly line workers ________

12. Depreciation of office equipment ________

13. Glue and thread used to make the helmet ________

14. Wages of factory janitor ________

Answer 1

1. Maintenance costs on factory building _______	OH
2. Factory manager's salary ________	OH
3. Advertising for helmets ________	PC
4. Sales commissions ________	PC
5. Depreciation on factory building ________	OH
6. Rent on factory equipment ________	OH
7. Insurance on factory building ________	OH
8. Plastic used to make helmet ________	DM
9. Utility costs for factory ________	OH
10. Supplies for general office ________	PC
11. Wages for assembly line workers ________	DL
12. Depreciation of office equipment ________	PC
13. Glue and thread used to make the helmet ________	OH
14. Wages of factory janitor ________	OH