E1-2 Presented below is a list of costs and expenses usually incurred by Barnum Corpora- tion, a manufacturer of furniture, in its factory. 1. Salaries for assembly line inspectors. 2. Insurance on factory machines. 3. Property taxes on the factory building. 4. Factory repairs. 5. Upholstery used in manufacturing furniture. 6. Wages paid to assembly line workers. 7. Factory machinery depreciation. 8. Glue, nails, paint, and other small parts used in production. 9. Factory supervisors' salaries. 10. Wood used in manufacturing furniture. Instructions Classify the above items into the following categories: (a) direct materials, (b) direct labor, and (c) manufacturing overhead. E1-3 Ryan 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 above costs as direct materials, direct labor, manufacturing over- head, or period costs. (b) Explain the basic difference in accounting for product costs and period costs. $69,100 46,400 E1-4 Knight Company reports the following costs and expenses in May. Factory utilities $ 15,500 Direct labor Depreciation on factory Sales salaries equipment 12,650 Property taxes on factory Depreciation on delivery trucks 3,800 building Indirect factory labor 48,900 Repairs to office equipment Indirect materials 80,800 Factory repairs Direct materials used 137,600 Advertising Factory manager's salary 8,000 Office supplies used 2,500 1,300 2,000 15,000 2,640 Instructions From the information, determine the total amount of: (a) Manufacturing overhead. (b) Product costs. (c) Period costs. E1-8 Lopez Corporation incurred the following costs while manufacturing its product. Materials used in product $120,000 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 Sales commissions 35,000 workers 110,000 Salaries paid to sales Factory supplies used 23,000 clerks 50,000 Work in process inventory was $12,000 at January 1 and $15,500 at December 31. Finished goods inventory was $60,000 at January 1 and $45,600 at December 31. Instructions (a) Compute cost of goods manufactured. (b) Compute cost of goods sold