Each of the following costs pertains to Bailey Dairy Productsâ Company, a dairy processing company. Classify each of theâ company's costs as a period cost or a product cost. Further classify product costs as either direct materialâ (DM), direct laborâ (DL), or manufacturing overheadâ (MOH).
Period cost
If product cost,
or product cost
DM, DL or MOH
1.
Television advertisements for Baileyâs products
2.
Lubricants used in running bottling machines
3.
Research and development related to elimination of anti-biotic residues in milk
4.
Gasoline used to operate refrigerated trucks delivering finished dairy
products to grocery stores
5.
Company presidentâs annual bonus
6.
Depreciation on refrigerated trucks used to collect raw milk from local
dairy farmers
7.
Plastic gallon containers in which milk is packaged
8.
Property insurance on dairy processing plant
9.
Cost of milk purchased from local dairy farmers
10.
Depreciation on tablets used by sales staff
11.
Wages and salaries paid to machine operators at dairy processing plant
Each of the following costs pertains to Bailey Dairy Productsâ Company, a dairy processing company. Classify each of theâ company's costs as a period cost or a product cost. Further classify product costs as either direct materialâ (DM), direct laborâ (DL), or manufacturing overheadâ (MOH).
| Period cost | If product cost, | ||||
| or product cost | DM, DL or MOH | ||||
| 1. | Television advertisements for Baileyâs products | |
| 2. | Lubricants used in running bottling machines | |
| 3. | Research and development related to elimination of anti-biotic residues in milk | |
| 4. | Gasoline used to operate refrigerated trucks delivering finished dairy | ||||
| products to grocery stores | |
| 5. | Company presidentâs annual bonus | |
| 6. | Depreciation on refrigerated trucks used to collect raw milk from local | ||
| dairy farmers |
| 7. | Plastic gallon containers in which milk is packaged | |
| 8. | Property insurance on dairy processing plant |
| 9. | Cost of milk purchased from local dairy farmers | |
| 10. | Depreciation on tablets used by sales staff | |
| 11. | Wages and salaries paid to machine operators at dairy processing plant | |
