Classification of Costs
Using the Code Letters Below, Indicate in the Space

Classification of costs
Using the code letters below, indicate in the space provided how each of the following costs should be classified in the indicated manufacturing company:
$$\begin{array} { | l | l | } \hline & \text { Code Letters } \\\hline \text { DM = Direct materials } & \text { WP = Work in process } \\\hline \text { DL = Direct labor } & \text { FG = Finished goods } \\\hline \text { MO = Manufacturing overhead } & \text { PC Period cost } \\\hline\end{array}$$
Costs
______ (a) Research and development costs incurred by Martin, manufacturer of derailleurs, brakes, and other component parts for bicycles in its efforts to develop new products.
______ (b) Salaries paid by Martin to the plant managers supervising production operations.
______ (c) An inventory of Martin Group 105 components purchased by Earl Bicycle Corporation for use in the manufacture of Earl 's Model 1200 aluminum bicycle.
______ (d) An inventory of Model 1200 bicycle frames manufactured by Earl. Prior to sale, these frames will be painted and equipped with derailleurs, brakes, and other component parts.
______ (e) Salaries paid by Earl to its sales personnel.
______ (f) Salaries paid by Earl to employees who install derailleurs, brakes, and other component parts on the bicycle frames.
______ (g) An inventory of Martin Group 105 derailleurs awaiting sale to customers.

Correct Answer:

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(a) PC (b)...

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