Question

cost

1. depreciation on refrigerated trucks used to collect raw milk from local dairy farmers
2. plastic gallon containers in which milk is packaged
3. property insurance on dairy processing plant
4. cost of milk purchased from local dairy farmers
5. depreciation on tablets used by sales staff
6. wages and salaries paid to machine operators at dairy processing plant

\t\t\t\t\t\t\tperiod cost or
\t\t\t\t\t\t\tproduct cost\tdm, dl or moh

Explanation:

1. Item 6: Trucks for raw milk collection support production; depreciation is manufacturing overhead (a product cost).
2. Item 7: Plastic containers are direct materials to package the final milk product (product cost).
3. Item 8: Plant insurance is a cost of operating production facilities, so it is manufacturing overhead (product cost).
4. Item 9: Purchased milk is the primary direct material for the final dairy product (product cost).
5. Item 10: Sales staff tablets support selling, not production, so this is a period cost.
6. Item 11: Machine operators directly work on processing milk, so their wages are direct labor (product cost).

Answer:

1. Period Cost or Product Cost: Product Cost; DM, DL or MOH: MOH
2. Period Cost or Product Cost: Product Cost; DM, DL or MOH: DM
3. Period Cost or Product Cost: Product Cost; DM, DL or MOH: MOH
4. Period Cost or Product Cost: Product Cost; DM, DL or MOH: DM
5. Period Cost or Product Cost: Period Cost; DM, DL or MOH: N/A
6. Period Cost or Product Cost: Product Cost; DM, DL or MOH: DL