Woodworking Ltd. suffered a fire recently in its manufacturing facility. As a result, the entire plant and its contents were all destroyed. Fortunately, the accounting department is in a separate office building and, thus, the accounting records are intact. At the end of January, the company reported the following: Sales revenues $ 900,000 Prime costs for the month of January $ 529,200 Conversion costs for the month of January $ 540,000 Direct materials (DM) January 1 $ 28,800 Direct materials (DM) purchased in January 1 $ 288,000 Direct manufacturing labour costs $ 324,000 Manufacturing overhead costs 40% of conversion costs Work in process, January 1 $ 115,200 Finished goods, January 1 $ 54,000 Costs of goods manufactured $ 810,000 Gross margin percentage (based on sales revenues) 20%

Required: (A) What is the gross margin on January 31st?

(B) What is the cost of goods sold on January 31st?

(C) What is the cost of finished goods inventory on January 31st?

(D) What is the cost of work-in-process inventory on January 31st?

(E) What is the cost of direct materials inventory on January 31st?

(F) What are product costs and period costs? In your answer, ensure that you give examples of each type of cost. Why is it important for a company to distinguish between these two types of costs? That is, what are the possibly consequences for misclassifying product costs and period costs?