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