Puff ’n Stuff makes various small toys for dogs and cats using a large machine that cuts the fabric and machine- stitches the seams. The toys are then hand- stuffed and packaged. For Step 1, sort the following costs into direct, machine based, and people-based costs using D for direct to product, M for machine, and P for people. For Step 2, if the resource seems shared, use an S. Finally, if you are unsure, use an O for overhead.

Depreciation ............................. Insurance

Salaries ...................................... Thread

Machine ....................................  maintenance Stu ng

Packaging ................................. materials Worktables

Electricity ..................................  Materials

Building .................................... Machine oil

Supervisor ................................ Pay roll service