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 of production supervisor f. Depreciation on office equipment g. Salary of CEO h. Delivery expense Choose from any drop-down list and then continue to the next question.
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 of production supervisor f. Depreciation on office equipment g. Salary of CEO h. Delivery expense Choose from any drop-down list and then continue to the next question.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
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.)
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Product
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Product
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Period
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Cost
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DM
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DL
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MOH
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Prime
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Conversion
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Selling
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Admin.
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a.
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Metal used for rims
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X
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X
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b.
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Sales salaries
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c.
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Rent on factory
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d.
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Wages of assembly
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workers
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e.
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Salary of production
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supervisor
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f.
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Depreciation on
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office equipment
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g.
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Salary of CEO
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h.
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Delivery expense
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Choose from any drop-down list and then continue to the next question.
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