Bacala Corporation incurred the following costs while manufacturing its product.
|
Materials used in product |
$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 |
|
Factory supplies used |
13,000 |
Salaries paid to sales clerks |
50,000 |
Instructions
(a) Identify each of the costs as direct materials, direct labor, manufacturing overhead, or period costs.
(b) Explain the basic difference in accounting for product costs and period costs.