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Indicate whether each of the following cost of an automobile manufacturer would be classified as direct materials, direct labor, or manufacturing overhead.

(a) ___ Windshield
(b) ___ Engine
(c) ___ Wages of assembly line worker
(d) ___ Depreciation of factory machinery
(e) ___ Factory Machinery lubricants
(f) ___ Tires
(g) ___ Steering wheel
(h) ___ Salary of painting supervisor

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Answer:

a) DM Windshield

(b) DM Engine

(c) DL Wages of assembly line worker

(d) MO Depreciation of factory machinery

(e) MO Factory Machinery lubricants

(f) DM Tires

(g) DL Steering wheel

(h) MO Salary of painting supervisor

Explanation:

Direct materials (DM) are those materials and supplies that are consumed during the manufacture of a product, and which are directly identified with that product.

Direct labor (DL) is production or services labor that is assigned to a specific product, cost center, or work order.

Manufacturing overhead (MO) is all indirect costs incurred during the production process.

(a) DM Windshield

(b) DM Engine

(c) DL Wages of assembly line worker

(d) MO Depreciation of factory machinery

(e) MO Factory Machinery lubricants

(f) DM Tires

(g) DL Steering wheel

(h) MO Salary of painting supervisor

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