Instructions: There are a total of five brief exercise, you only need to complete four. If you answer
all five, I will take your highest four exercises you have completed; each question is worth 10
points.
Brief Exercise 1:
Determine whether each of the following costs should be classified as direct materials (DM), direct
labor (DL), or manufacturing overhead (MO).
Depreciation on factory equipment
a.
b.
Table legs used in manufacturing tables
c.
Wages paid to assembly line workers
d.
Factory rent
Brief Exercise 2:
Indicate whether each of the following costs of a pencil manufacturer would be classified as direct
materials (DM), direct labor (DL), or manufacturing overhead (MO).
Depreciation of pencil painting machinery
Lead inserted into pencils
Factory utilities
Wages of assembly line worker
a.
b.
c.
d.
e.
Salary of supervisor
f.
Factory machinery maintenance
g.
Wood
h.
Eraser compound
Brief Exercise 3:
Identify whether each of the following is classified as a product cost or a period cost.
1. Direct labor
2. Direct materials
3. Factory utilities
4. Repairs to office equipment
5. Property taxes on factory building
6. Sales salaries
