esCompanies incur all sorts of costs to perform their business processes. Cost accountants will classify them in certain ways tounderstand them.Required:Classify the following company costs as period or products costs, and as prime and/or conversion costs.Company Costsa. Factory insuranceb. Hourly production wages for employees working on assembly linec. Product marketinging commissionsd. Equipment repaire. Rent on factory buildingf. Corporate office maintenanceg. Direct materialsh. Business licensesPeriod or Product CostsPrime and or Conversion Costs

In cost accounting, costs are classified in different ways to understand them better. The two…

Answered: es Companies incur all sorts of costs…

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter18: Accounting Periods And Methods

Section: Chapter Questions

Problem 23DQ

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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
Walsh & Coggins, a professional accounting firm, collects cost information about the services they provide to their clients. Describe the types of cost data they would collect and explain the importance of analyzing this cost data.
From the choices presented in parentheses, choose the appropriate term for completing each of the following sentences: a. A product, sales territory, department, or activity to which costs are traced is called a (direct cost, cost object). b. Advertising costs are usually viewed as (period, product) costs. c. Factory overhead costs combined with direct labor costs are called (prime, conversion) costs. d. Feedback is often used to (improve, direct) operations. e. A sacrifice made to obtain some benefit is a (cost, expense). f. The balance sheet of a manufacturer would include an account for (cost of goods sold, work in process inventory). g. The implementation of automatic, robotic factory equipment normally (increases, decreases) the direct labor component of product costs.
In job order cost accounting, the three elements of manufacturing cost are charged directly to job orders. Why is it not necessary to charge manufacturing costs in process cost accounting to job orders?
The activity base for service industries is most likely to be _________________. A. machine hours B. administrative salaries C. direct labor cost D. direct labor hours
Interview questions are asked to determine a. what activities are being performed. b. who performs the activities. c. the relative amount of time spent on each activity by individual workers. d. possible activity drivers for assigning costs to products. e. All of these.
Which of the following statements is true? a. Job-order costing is used only in manufacturing firms. b. Process costing is used only for services. c. Job-order costing is simpler to use than process costing because the recordkeeping requirements are less. d. The job cost sheet is subsidiary to the work-in-process account. e. All of these.
Freeman Furnishings has summarized its data as shown: Compute the cost of goods manufactured, assuming that the overhead is allocated based on direct labor hours
Which of the following is a prime cost? A. direct labor B. work in process inventory C. administrative labor D. factory maintenance expenses
Explain how the income statement of a manufacturing company differs from the income statement of a merchandising company.
Statement of cost of goods manufactured and income statement for a manufacturing company The following information is available for Shanika Company for 20Y6: Instructions 1. Prepare the 20Y6 statement of cost of goods manufactured. 2. Prepare the 20Y6 income statement.
For apparel manufacturer Abercrombie Fitch, Inc. (ANF), classify each of the following costs as either a product cost or a period cost: a. Advertising expenses b. Chief financial officers salary c. Depreciation on office equipment d. Depreciation on sewing machines e. Fabric used during production f. Factory janitorial supplies g. Factory supervisors salaries h. Property taxes on factory building and equipment i. Oil used to lubricate sewing machines j. Repairs and maintenance costs for sewing machines k. Research and development costs l. Sales commissions m. Salaries of distribution center personnel n. Salaries of production quality control supervisors o. Travel costs of media relations employees p. Utility costs for office building q. Wages of sewing machine operators

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