Question
Blue Corporation incurred the following costs while manufacturing its product: Materials used in product $100,000 Advertising Expense $50,000 Depreciation on plant $75,000 Property taxes on
Blue Corporation incurred the following costs while manufacturing its product:
Materials used in product $100,000 | Advertising Expense $50,000 |
Depreciation on plant $75,000 | Property taxes on plant $15,000 |
Property taxes on store $7,500 | Delivery Expense $20,000 |
Labor costs of assembly line workers $125,000 | Sales Commissions $40,000 |
Factory supplies used $13,500 | Salaries to sales clerk $50,000 |
Instructions:
Identify each of the above costs as direct materials, direct labor, manufacturing overhead, or period costs.
Explain the basic difference in accounting for product costs and period costs.
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