Identification of Inventory Costs and Categories
The records of Burtone Company contain the following cost categories. Burtone manufactures exercise equipment and iron weights.
(a) Cost of materials used to repair factory equipment
(b) Depreciation on the fleet of salespersons’ cars
(c) Cost to purchase iron
(d) Salaries of the factory supervisors
(e) Cost of heat, electricity, and insurance for the company office building
(f) Wages of the workers who shape the iron weights
(g) Property taxes on the factory building
(h) Cost of oil for the factory equipment
(i) Salary of the company president
(j) Pension benefits of workers who repair factory equipment
For each category, indicate whether the cost is an inventory cost (I) or if it should be expensed as incurred (E). For each inventory cost, indicate whether the cost is part of direct materials (DM), direct labor (DL), or manufacturing overhead (MOH).