A 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

A 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

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Factory overhead costs do not include which of the following: a. insurance b. heating c. taxes d,…

A: Overhead is like an expense which does require and incurred to operate day to day business…

Q: A bicycle company has these costs: tires, salaries of employees who put tires on the wheels, factory…

A: Lets understand the basics.Costs are divided into direct and indirect costs.Direct costs are costs…

Q: Which of the following is not a cost resulting from a unit-level activity? a) The cost of…

A: Unit-level activities:Occur each time a single unit of a product or service is produced or…

Q: 1. Property taxes on the factory building. 2. Production superintendents' salaries. 3. Memory boards…

A: The direct materials are the materials used for production process directly. The direct labor…

Q: Which of the following is/are true for the cost flow process? (check all that apply) Cost of goods…

A: “Since you have posted multiple questions, we will provide the solution only to the first question…

Q: Use a / to categorize each of the following costs. You may have more than one / for each item.…

A: There are majorly three types of costs such as variable costs, fixed costs and semi-variable costs.…

Q: Prime vs conversion cost. For each of the following costs incurred in a manufacturing operation,…

A: Prime costs : It refers to the three important elements of costs: direct materials, direct labor and…

Q: d the Direct labor paid and assigned to Work in Process Inventory. Record the indirect labor paid…

A: Solution 1) Job 306 Job 307 Job 308 April Total From March Direct Materials 26000…

Q: The following is a list of costs and expenses usually incurred by Barnum Corporation, a manufacturer…

A: Manufacturing overhead: All secondary expenditures incurred throughout the production process are…

Q: Which of the following are a product (manufacturing) cost? (check all that apply) Materials that…

A: The cost that can be traced back to a specific product and is included in inventory values is known…

Q: The Vlad Corporation manufactures street signs; the cost of wages for the factory manager would be…

A: Overhead refers to the ongoing operational expenses that a business incurs as part of its normal…

Q: 1.3 Separation between direct and indirect costs. Sort the costs by matching these in terms:…

A: 📌 Product CostsProduct costs, also known as inventoriable costs, are those costs that are directly…

Q: What costs are considered conversion costs? a. Steel in a car factory b. Depreciation on factory…

A: Conversion costs include the costs that are incurred to convert the raw material into usable goods.…

Q: Selected costs related to Apple's iPhone are listed below. Classify each cost as either direct…

A: Direct materials is the amount of material which is used in the product and necessary to use to…

Q: As mentioned, direct costs are not always product or manufacturing costs. Consider a company that…

A: These costs are not related to the production process at all. Instead, they are incurred over a…

Q: 6. Engineers who design cars for a car manufacturing company submit their timesheets. The entry to…

A: Direct labor costs refer to the payments made to those workers or employees who are directly…

Q: For each of the following costs, identify whether it is a Fixed, Variable or Both

A: Introduction to variable cost- Variable cost is one of the costs among fixed cost and semi-variable…

Q: Indicate whether the following costs of Procter & Gamble, a maker of consumer products, would be…

A: Direct Material Cost Direct material cost is the cost of the raw materials and components used to…

Q: organiza 47. Which of the following is an example of a direct cost an organization might incur in…

A: The cost of the Raw Materials that go into the product is an example of a direct cost an…

Q: a. Identify the factory overhead item and the total in USD b. Identify the period cost and the…

A: a. Manufacturing overheads: Depreciation plant and equipment 100 Plant Insurance 200…

Q: Which of the following is an example of direct labor cost for a cell phone manufacturer? Oa. cost of…

A: Direct Labor Cost: It is the cost which can be specifically and consistently assigned to…

Q: Classifying Costs as Materials, Labor, or Factory Overhead Indicate whether each of the following…

A: Lets first understand the meaning of material, labor and factory overhead cost. Direct material…

Q: Classify the following costs as period or traceable costs. Depreciation on office building Insurance…

A: All indirect costs incurred during production are referred to as period costs. Examples of period…

Q: The production of the rest stop benches requires the following costs. For each cost, determine how…

A: Direct material is the cost of material purchased for the production process of the company. Direct…

Concept explainers

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Question

100%

A 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

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1 Introduction

VIEW

Step 2 Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Indicate whether each cost is: A. Fixed or Variable b. Selling, General/Administrative, or Manufacturing
Gala Company is a manufacturer of laptop computers. Various costs and expenses associated with its operations are as follows. The company intends to classify these costs and expenses into the following categories: direct materials, direct labor, manufacturing overhead, and period costs. For each item, indicate the cost category to which it belongs. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Property taxes on the factory building. Production superintendents' salaries. Memory boards and chips used in assembling computers. Depreciation on the factory equipment. Salaries for quality control inspectors. Sales commissions paid to sell laptop computers. Electrical components used in assembling computers. Wages of workers assembling laptop computers. Soldering materials used on factory assembly lines. Salaries for the night security guards for the factory building. Category
2. The entry to assign the costs of indirect labor for the janitor responsible for cleaning the factory where a manufacturer makes cars would include a debit to which account? O manufacturing overhead O work-in-process inventory O finished goods inventory Owages payable
Which of the following costs is best classified as a fixed cost with respect to volume of activity? (See your Chapter 20 notes, page 5) Direct labor Electricity used to heat, light, and cool a factory Cleaning supplies used in an automobile assembly plant Straight-line depreciation expense of a machine used in a factory Total cost of salaries paid to quality inspectors in a manufacturing plant Tires used in an automobile manufacturing plant
Bastille Company employ new employee and are assigned to make Statement of Cost of Manufactured, Statement of Cost of Goods Sold, and Income Statement. The results attached on picture below Questions : a. Identify the factory overhead item and the total in USD b. Identify the period cost and the total in USD c. If there is something wrong with the income statement above, correct the income statement above so all the item cost is where it should be.
For apparel manufacturer Abercrobmie & Fitch, Inc., classify each of the following costs as either a product cost or a period cost: Research and development costs Depreciation on sewing machines Fabric used during production Depreciation on office equipment Advertising expenses Repairs and maintenance costs for sewing machines Salary of production quality control supervisor Utility costs for office building Sales commissions Salaries of distribution center personnel Wages of sewing machine operators Factory janitorial supplies Chief financial officer’s salary Travel costs of media relations employees Factory supervisors’ salaries Oil used to lubricate sewing machines Property taxes on factory building and equipment
For each cost, indicate whether it would most likely be classified as direct materials, direct labor, manufacturing overhead, or selling and administrative. (a) Amortization of patents on factory machine (b) Components used to make product A (Select one) (Select one) (Select one) (c) Direct materials used (d) Factory utilities (e) Property taxes - factory. (f) The cost of a hard-drive installed in a computer for a computer assembling company (g) The wages of employees who assemble computers from components (h) The wages of the company's accountant (i) Wages of the product tester () Wages to assembly line A workers (Select one) (Select one) (Select one) (Select one) (Select one) (Select one) (Select one)
Under variable costing, which of the following costs would not be included in finished goods inventory? a. electricity used by factory machinery b. steel costs for a machine tool manufacturer c. salary of factory supervisor d. wages of machine operator