Ryan Corporation incurred the following costs while manufacturing its product.
|
Materials used in product
|
$100,000
|
Advertising expense
|
$45,000
|
|
Depreciation on plant
|
60,000
|
Property taxes on plant
|
14,000
|
|
Property taxes on store
|
7,500
|
Delivery expense
|
21,000
|
|
Labor costs of assembly-line workers
|
110,000
|
Sales commissions
|
35,000
|
|
Factory supplies used
|
13,000
|
Salaries paid to sales clerks
|
50,000
|
Instructions
(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.