Elements of Manufacturing CostsDaisy Luna, the bookkeeper at Candlelight, Inc.

Elements of Manufacturing Costs

Daisy Luna, the bookkeeper at Candlelight, Inc., must group the costs of manufacturing candles. Indicate whether each of the following items should be classified as direct materials (DM), direct labor (DL), overhead (O), or none of these (N). Also indicate whether each is a prime cost (PC), a conversion cost (CC), or neither (N).

1. Depreciation of the cost of vats to hold melted wax

2. Cost of wax

3. Rent on the factory where candles are made

4. Cost of George’s time to dip the wicks into the wax

5. Cost of coloring for candles

6. Cost of Ray’s time to design candles for Halloween

7. Sam’s commission to sell candles to Candles Plus

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