Exercise 15-3 (Essay)

Trak Corporation incurred the following costs while manufacturing its bicycles.

Bicycle components $100,000 Advertising expense $45,000
Depreciation on plant 60,000 Property taxes on plant 14,000
Property taxes on store 7,500 Delivery expense 21,000
Labor costs of assembly-line workers 110,000 Sales commissions 35,000
Factory supplies used 13,000 Salaries paid to sales clerks 50,000


Explain the basic difference in accounting for product costs and period costs.