(i) Indicate whether each of the following is a direct cost (D), an indirect cost (ID), or neithe

(i) Indicate whether each of the following is a direct cost (D), an indirect cost (ID), or neither (N) and a variable (V) or a fixed (F) cost. Also indicate whether each adds value (VA) or does not add value (NVA) to the product and whether each is a product cost (PD) or a period cost (PER).

1. Production supervisor’s salary

2. Sales commission

3. Wages of a production-line worker

(ii) Using the following information from Hakim Company, prepare an income statement through operating income for the year:

Sales

$900,000

Finished goods inventory, beginning

45,000

Cost of goods manufactured

585,000

Finished goods inventory, ending

60,000

Operating expenses

275,000

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