Exercise 15-3 (Essay)

Trak Corporation incurred the following costs while manufacturing its bicycles.

Bicycle components	$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

(b)

Explain the basic difference in accounting for product costs and period costs.