Question 1
Which of the following is a direct manufacturing cost?
◦ plant maintenance
◦ plant rent
◦ fringe benefits paid to machine operators
◦ property taxes on plant
Question 2
Which of the following is a period cost?
◦ costs incurred to provide customer service such as the operation of a 800 phone line to trouble shoot product problems and to answer questions about product warranties
◦ the cost of materials used to make a product when those materials are an insignificant part of the finished product
◦ the cost of direct labor
◦ the amount of depreciation expense recognized because of the use of plant assets such as building and equipment