1 Identify types of cost

Product Costs
Manufacturing Period
a Cost Item Direct Materials Direct Labor Overhead Costs
Bicycle components $100,000
Depreciation on plant 60,000
Property taxes on store 7,500
Labor costs of assembly-line workers 110,000
Factory supplies used 13,000
Advertising expense 45,000
Property taxes on plant 14,000
Delivery expense 21,000
Sales commissions 35,000
Salaries paid to sales clerks 50,000

Product Costs
Manufacturing Period
b Cost Item Direct Materials Direct Labor Overhead Costs
Factory utilities $15,500
Depreciation on factory equipment 12,650
Depreciation on delivery trucks 3,800
Indirect factory labor 48,900
Indirect materials 80,800
Direct materials used 137,600
Factory manager’s salary 8,000
Direct labor $69,100
Sales salaries 46,400
Property taxes on factory building 2,500
Repairs to offi ce equipment 1,300
Factory repairs 2,000
Advertising 15,000
Office supplies used 2,640

2 Compute cost of goods manufactured and cost of goods sold

Materials used in product $120,000

Depreciation on plant 60,000
Property taxes on store 7,500
Labor costs of assembly-line workers 110,000
Factory supplies used 23,000
Advertising expense 45,000
Property taxes on plant 14,000
Delivery expense 21,000
Sales commissions 35,000
Salaries paid to sales clerks 50,000

Work in process inventory was $12,000 at January 1 and $15,500 at December 31.
Finished goods inventory was $60,000 at January 1 and $45,600 at December 31.