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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
- 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.
- Cost of the rubber that goes into the tire
- Depreciation cost of $10,000 per year for equipment used by the companys top management
- Depreciation cost of $15,000 per year for machines used in the factory where the tires are made
- Depreciation cost of $12,000 per year for cars used by the companys salespeople
- 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.
- Commissions paid to the salespeople that equal $10 for each tire the salesperson sells.
- The cost of oil to lubricate the machines in the factory.
- Salary of the factory supervisor which is $9,000 per month
- Salary of the president of the company which is $20,000 per month.
- Salary of the sales manager that equals $15,000 per month.
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