Chapter 18, Problem 5E

To determine

Direct material cost is the cost which is directly associated with production. It is the cost of material which is used in manufacturing of a particular product.

Direct labor cost means the cost incurred or wages paid to labor which are directly associated with manufacturing of a particular product.

Factory overheads are the manufacturing expenses which are incurred for manufacturing of products.

Selling expenses are the expenses which are incurred in relation to sales of manufactured products.

General and administrative expenses are the period costs which are incurred in accounting period and having no relation with the manufacturing of a product.

In the question we have given the cost related to iPad. We have to classify the cost in below categories:

1. direct material or
2. direct labor or
3. factory overhead or
4. selling expense or
5. general and administrative expense