Bartel Corporation produces bar stools for restaurants. 1. For each of the following, indicate whether the cost would typically be considered direct or indirect cost for the cost object given.
A. Lubricants used on the bar stool manufacturing equipment.
B. The factory supervisor's salary for the bar stool factory.
C. The production labor wages for the bar stool assemblers.
D. Nails and screws used in the production of the bar stools.
E. Manufacturing costs for wood and steel used in the bar stools.
2. For each of the following, indicate whether the cost would typically be considered product or period cost for the cost object given.
A. Electricity costs to run the factory.
B. Accountant salaries.
C. Selling costs for the period.
D. Delivery costs to take the bicycles to stores.
E. Tires for the bicycles.

The answers are provided below

Explanation:

1. Direct cost are the major part of cost and can be traced to a cost object while indirect cost are typically small cost and difficult to trace to a specific cost object.

A. Lubricants used on the bar stool manufacturing equipment - indirect cost

B. The factory supervisor's salary for the bar stool factory - indirect cost

C. The production labor wages for the bar stool assemblers - direct cost

D. Nails and screws used in the production of the bar stools - direct cost

E. Manufacturing costs for wood and steel used in the bar stools - direct cost.

2. A manufacturer's product costs are direct labor, direct materials, and the manufacturing overhead that are used in making its products while the period costs are written as expenses in an accounting period. Period costs are associated with passage of time and examples include the general and administrative expenses, like rent, office supplies, office depreciation, and utilities

A. Electricity costs to run the factory - product cost

B. Accountant salaries - period cost

C. Selling costs for the period - period cost

D. Delivery costs to take the bicycles to stores - period cost

E. Tires for the bicycle - product cost

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