Chapter 17, Problem 2SE

​Wheels, Inc. manufactures wheels for​ bicycles, tricycles, and scooters. For each cost given​ below, determine if the cost is a product cost or a period cost. If the cost is a product​ cost, further determine if the cost is direct materials​ (DM), direct labor​ (DL), or manufacturing overhead​ (MOH) and then determine if the product cost is a prime​ cost, conversion​ cost, or both. If the cost is a period​ cost, further determine if the cost is a selling expense or administrative expense​ (Admin). Cost​ (a) is answered as a guide. ​(If an answer does not​ apply, leave the box​ blank.) Product Product Period Cost DM DL MOH Prime Conversion Selling Admin. a. Metal used for rims X     X       b. Sales salaries               c. Rent on factory               d. Wages of assembly                 workers               e. Salary…

Which of the following statements is true? a. Indirect materials and indirect labor are included in the manufacturing overhead. b. Examples of selling costs include sales commission, advertising, shipping, and the cost of operating finished goods warehouses, salaries of production supervisor. c. For financial accounting purposes, product costs include direct materials, direct labor, manufacturing overhead, and finance cost. d. For financial accounting purposes, period costs are also referred to as inventoriable costs.

Which of the following statements is true? (You may select more than one answer.)a. Conversion costs include direct materials and direct labor.b. Indirect materials are included in manufacturing overhead.c. Prime costs are included in manufacturing overhead.d. Selling costs are considered period costs