Ryan Corporation incurred the following costs while manufacturing its product. Materials used in product Depreciation on plant Property taxes on store Labor costs of assembly-line workers Factory supplies used Instructions $100,000 60,000 7,500 110,000 13,000 Advertising expense Property taxes on plant Delivery expense Sales commissions Salaries paid to sales clerks $45,000 14,000 21,000 35,000 50,000 (a) Identify each of the above costs as direct materials, direct labor, manufacturing overhead, or period costs. (b) Explain the basic difference in accounting for product costs and period costs.
Ryan Corporation incurred the following costs while manufacturing its product. Materials used in product Depreciation on plant Property taxes on store Labor costs of assembly-line workers Factory supplies used Instructions $100,000 60,000 7,500 110,000 13,000 Advertising expense Property taxes on plant Delivery expense Sales commissions Salaries paid to sales clerks $45,000 14,000 21,000 35,000 50,000 (a) Identify each of the above costs as direct materials, direct labor, manufacturing overhead, or period costs. (b) Explain the basic difference in accounting for product costs and period costs.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Ryan Corporation incurred the following costs while manufacturing its product.
Materials used in product Depreciation on plant
Property taxes on store
Labor costs of assembly-line workers Factory supplies used
Instructions
$100,000 60,000
7,500 110,000 13,000
Advertising expense Property taxes on plant
Delivery expense
Sales commissions Salaries paid to sales clerks
$45,000 14,000 21,000
35,000 50,000
(a) Identify each of the above costs as direct materials, direct labor, manufacturing overhead , or period costs. (b) Explain the basic difference in accounting for product costs and period costs.
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