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Indicate whether each item below is a product cost (inventoriable cost) or a period cost. If its a product cost say whether it is DM

  1. Indicate whether each item below is a product cost (inventoriable cost) or a period cost. If its a product cost say whether it is DM (direct materials), DL (direct labor) or MO (manufacturing overhead, also called indirect manufacturing costs). If it is a period cost, indicate whether it is AE (administrative expense) or SE (selling expense). Also indicate whether it is a fixed cost (FC) or a variable cost (VC). These costs are for a company that makes tires.
  1. Cost of the rubber that goes into the tire
  2. Depreciation cost of $10,000 per year for equipment used by the companys top management
  3. Depreciation cost of $15,000 per year for machines used in the factory where the tires are made
  4. Depreciation cost of $12,000 per year for cars used by the companys salespeople
  5. Cost of paying $15 per hour to the workers who make the tires. The more tires that are made, the more hours the workers work.
  6. Commissions paid to the salespeople that equal $10 for each tire the salesperson sells.
  7. The cost of oil to lubricate the machines in the factory.
  8. Salary of the factory supervisor which is $9,000 per month
  9. Salary of the president of the company which is $20,000 per month.
  10. Salary of the sales manager that equals $15,000 per month.

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