Imagine you own a small business that makes toy trains and toy cars in the same factory? The productions managers salary is a manufacturing overhead cost. provide two specific ways you could allocate this person's salary to the toy trains and toy cars
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Imagine you own a small business that makes toy trains and toy cars in the same factory? The productions managers salary is a
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- Following are selected costs of a company that manufactures computer chips. Classify each as either a product cost or a period cost. Then classify each of the product costs as direct material, direct labor, or overhead. 1. Plastic boards used to mount chips 2. Advertising costs 3. Factory maintenance workers’ salaries 4. Real estate taxes paid on the sales office 5. Real estate taxes paid on the factory 6. Factory supervisor salary 7. Depreciation on factory equipment 8. Assembly worker hourly pay to make chipsWhat factors would you consider in deciding whether to use direct labor dollars or direct labor hours in charging overhead to jobs in a service firm?Listed as follows are various costs found in businesses. Classify each cost as a fixed or variable cost, and as a product and/or period cost. Wages of administrative staff Shipping costs on merchandise sold Wages of workers assembling computers Cost of lease on factory equipment Insurance on factory Direct materials used in production of lamps Supervisor salary, factory Advertising costs Property taxes, factory Health insurance cost for company executives Rent on factory
- Stan is opening a coffee shop next to Big State University. He knows that controlling his costs will be important to the success of the shop. He will not be able to work all the hours the shop is open, so the employees will need some guidelines to perform their jobs correctly. After talking to an accounting professor, he decides he needs a standard cost system for his shop. Describe the process Stan should follow in setting his standards for materials and labor.Which business would most likely use a job-costing system? A) concrete block producer B) antique automobile restorer C) custom saddle maker D) companies B and C only E) all of these businesses are likely to use job-costing 2. The cost of direct manufacturing labor will be treated as an expense on the income statement when resulting: A) payroll costs are paid B) payroll costs are incurred C) products are completed D) products are sold 3. Actual manufacturing overhead costs are first recorded in the A) Work-in-Process Control account B) Finished Goods Control account C) Manufacturing Overhead Control account D) Cost of Goods Sold account 4. The advantage of using normal costing of actual costing is A) indirect costs are assigned at the end of the year when they are known B) the job cost is more accurate under normal costing C) indirect costs are assigned to jobs on a timelier basis D) normal costing provides a higher gross profit marginUse a / to categorize each of the following costs. You may have more than one / for each item. Product Costs Direct Direct Manufacturing Period Variable Fixed Materials Labor Overhead Cost Costs Costs CFO salary Factory utilities Factory supervisor salary Store equipment depreciation Factory equipment depreciation Advertising expense Model car tires Store property taxes Factory insurance Factory worker wages Marketing manager salary Glue and screws Machine maintenance costs
- What follows are a number of resources that are used by a manufacturer of futons. Assume thatthe output measure or cost driver is the number of futons produced. All direct labor is paid on an hourly basis, and hours worked can be easily changed by management. All other factoryworkers are salaried.a. Power to operate a drill (to drill holes in the wooden frames of the futons)b. Cloth to cover the futon mattressc. Salary of the factory receptionistd. Cost of food and decorations for the annual Fourth of July party for all factory employeese. Fuel for a forklift used to move materials in a factoryf. Depreciation on the factoryg. Depreciation on a forklift used to move partially completed goodsh. Wages paid to workers who assemble the futon framei. Wages paid to workers who maintain the factory equipmentj. Cloth rags used to wipe the excess stain off the wooden framesRequired:Classify the resource costs as variable or fixed.Alan is the owner of a new manufacturing business, producing the vehicle components for Proton Supreme V supplies. Advise him by classifying the following costs into the correct categories; fixed cost, variable costs, production overhead, administration overhead, or distribution overhead. Depreciation of machinery Repairs to machinery Supervisors’ salary Assemblers’ wages Electric power Wages for driver of delivery lorry Raw materials: steels and metals Nuts and bolts Delivery costs Salary to administrative staffA car manufacturer incurs the following costs. Classify each cost as either a product or period cost. If a product cost, classify it as direct materials, direct labor, or factory overhead. If a period cost, classify it as a selling expense or a general and administrative expense. Costs Cost Classification 1. Factory electricity 2. Advertising 3. Depreciation on factory machine 4. Batteries for electric cars 5. Office supplies used 6. Wages to assembly workers 7. Salesperson commissions 8. Steel for cars 9. Depreciation on office equipment 10. Leather for car seats
- Charles has provided some of the costs he expects to incur as follows. Decide on the classifications that could be applied to each of these costs using the table provided. The cost object in each case is the cheesecake. Cost Product Period Direct Direct Factory Selling Administrative Direct Indirect Prime Conversion Cost Materials Labor Overhead Expense Expense Cost Cost Cost Cost Eggs used to make cheesecakes Baker’s wages Delivery driver wages Depreciation of office computers Power to run the cheesecake ovens President’s salary Sales commissions Factory supervisor salaryListed as follows are various costs found in businesses. Classify each cost as a fixed or variable cost, and as a product and/or period cost. a. Wages of administrative staff b. Shipping costs on merchandise sold C. Wages of workers assembling computers d. Cost of lease on factory equipment e. Insurance on factory f. Direct materials used in production of lamps g. Supervisor salary, factory h. Advertising costs_ i. Property taxes, factory j. Health insurance cost for company executives k. Rent on factoryClassify the following costs of this new product as direct materials, direct labor, manufacturing overhead, selling, or administrative 1. President's salary. 2. Packages used to hold the skin wipes. 3. Cleaning materials used to clean the skin wipe packages. 4. Wages of workers who package the product. 5. Cost of advertising the product. 6. The salary of the supervisor of the workers who package the product. 7. Cost accountant's salary (the accountant works in the factory). 8. Cost of a market research survey. 9. Sales commissions paid as a percent of sales. 10. Depreciation of administrative office building. Problem B Classify the costs listed in the previous problem as either product costs or period costs.
