Answer:
Instructions are listed below
Explanation:
- Direct materials are those materials and supplies that are consumed during the manufacture of a product, and which are directly identified with that product.
- Direct labor is production or services labor that is assigned to a specific product, cost center, or work order.
- Manufacturing overhead refers to indirect factory-related costs that are incurred when a product is manufactured.
- Period costs are not directly tied to the production process. Overhead or sales, general, and administrative (SG&A) costs are considered period costs. SG&A includes costs of the corporate office, selling, marketing, and the overall administration of company business.
- Product costs are the direct costs involved in producing a product. A manufacturer, for example, would have production costs that include: Direct labor, Raw materials, Manufacturing supplies, Overhead that's directly tied to the production facility such as electricity.
In this exercise:
a. Annual picnic for plant employees and their families: Period costs-administrative expense.
b. Cost of fabric used by clothing manufacturer: Product costs- DM
c. Cost of plastic for a toy manufacturer: Product costs-DM
d. Cost of sewing machine needles used by a shirt manufacturer: Product costs- MOH
e. Cost of television commercials: Period cost - Selling
