Paul Stanley specializes in manufacturing motorcycle helmets

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 ________

Solution

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