Example 1:

Determine whether each of the following costs should be classified as direct materials (DM), direct labor (DL), or manufacturing overhead (MO).

a.____Depreciation on factory equipment

b.____Table legs used in manufacturing tables

c.____Wages paid to assembly line workers

d.____Factory rent

Example 2:

Indicate whether each of the following costs of a pencil manufacturer would be classified as direct materials (DM), direct labor (DL), or manufacturing overhead (MO).

a.____Depreciation of pencil painting machinery

b.____Lead inserted into pencils

c.____Factory utilities

d.____Wages of assembly line worker

e.____Salary of supervisor

f.____Factory machinery maintenance

g.____Wood

h.____Eraser compound

Example 3:

A manufacturing company has identified several costs. Indicate whether each of the following costs is an Inventoriable cost(I) or a Period cost(P):

_____ 1. Rent Expense on factory equipment

_____ 2. Cost of subassemblies used in producing product

_____ 3. Wages of machine operators in factory

_____ 4. Rent Expense on computers at corporate office

_____ 5. Wage Expense for janitors in factory

_____ 6. Repairs Expense for factory equipment

_____ 7. Office Supplies Expense at corporate office

_____ 8. Wage Expense for janitors at corporate office

_____ 9. Wages of security guards at corporate office

_____ 10. Property taxes on factory building and land

_____ 11. Wages of security guards at factory

_____ 12. Wages of forklift driver in factory

_____ 13. Supplies Expense for factory

_____ 14. Wages of forklift operators in factory

_____ 15. Distribution Expenses