EX 18-4 Classifying costs as product or period costs For apparel manufacturer Abercrombie & Fitch, Inc., classify each of the following costs as either a product cost or a period cost: OBJ. 2 Real World a. Cost of information technology support for the corporate headquarters i. Sales commissions j. Salaries of distribution center personnel b. Depreciation on sewing machines c. Fabric used during production k. Wages of sewing machine operators 1. Factory janitorial supplies m. Chief financial officer's salary d. Depreciation on office equipment e. Advertising expenses n. Travel costs of media relations f. Repairs and maintenance costs for sewing machines employees o. Factory supervisors' salaries g. Salary of production quality control mom supervisor p. Oil used to lubricate sewing machines q. Property taxes on factory building and equipment h. Utility costs for office building EX 18-10 Financial statements of a manufacturing firm The following events took place for Digital Vibe Manufacturing Company during January, the first month of its operations as a producer of digital video monitors: a. Purchased $168,500 of materials. OBJ. 4 . Net income, 5,000 Show Me How b. Used $149,250 of direct materials in production. c. Incurred $360,000 of direct labor wages. d. Incurred $120,000 of factory overhead. e. Transferred $600,000 of work in process to finished goods. f. Sold goods for $875,000. g. Sold goods with a cost of $525,000. h. Incurred $125,000 of selling expense. i. Incurred $80,000 of administrative expense. Using the information given, complete the following: a. Prepare the January income statement for Digital Vibe Manufacturing Company. b. Determine the Materials Inventory, Work in Process Inventory, and Finished Goods Inventory balances at the end of the first month of operations.
EX 18-4 Classifying costs as product or period costs For apparel manufacturer Abercrombie & Fitch, Inc., classify each of the following costs as either a product cost or a period cost: OBJ. 2 Real World a. Cost of information technology support for the corporate headquarters i. Sales commissions j. Salaries of distribution center personnel b. Depreciation on sewing machines c. Fabric used during production k. Wages of sewing machine operators 1. Factory janitorial supplies m. Chief financial officer's salary d. Depreciation on office equipment e. Advertising expenses n. Travel costs of media relations f. Repairs and maintenance costs for sewing machines employees o. Factory supervisors' salaries g. Salary of production quality control mom supervisor p. Oil used to lubricate sewing machines q. Property taxes on factory building and equipment h. Utility costs for office building EX 18-10 Financial statements of a manufacturing firm The following events took place for Digital Vibe Manufacturing Company during January, the first month of its operations as a producer of digital video monitors: a. Purchased $168,500 of materials. OBJ. 4 . Net income, 5,000 Show Me How b. Used $149,250 of direct materials in production. c. Incurred $360,000 of direct labor wages. d. Incurred $120,000 of factory overhead. e. Transferred $600,000 of work in process to finished goods. f. Sold goods for $875,000. g. Sold goods with a cost of $525,000. h. Incurred $125,000 of selling expense. i. Incurred $80,000 of administrative expense. Using the information given, complete the following: a. Prepare the January income statement for Digital Vibe Manufacturing Company. b. Determine the Materials Inventory, Work in Process Inventory, and Finished Goods Inventory balances at the end of the first month of operations.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:EX 18-4 Classifying costs as product or period costs
For apparel manufacturer Abercrombie & Fitch, Inc., classify each of the following costs as
either a product cost or a period cost:
OBJ. 2
Real
World
a. Cost of information technology support
for the corporate headquarters
i. Sales commissions
j. Salaries of distribution center personnel
b. Depreciation on sewing machines
c. Fabric used during production
k. Wages of sewing machine operators
1. Factory janitorial supplies
m. Chief financial officer's salary
d. Depreciation on office equipment
e. Advertising expenses
n. Travel costs of media relations
f. Repairs and maintenance costs for
sewing machines
employees
o. Factory supervisors' salaries
g. Salary of production quality control
mom supervisor
p. Oil used to lubricate sewing machines
q. Property taxes on factory building and
equipment
h. Utility costs for office building
Transcribed Image Text:EX 18-10 Financial statements of a manufacturing firm
The following events took place for Digital Vibe Manufacturing Company during January,
the first month of its operations as a producer of digital video monitors:
a. Purchased $168,500 of materials.
OBJ. 4
. Net income,
5,000
Show
Me
How
b. Used $149,250 of direct materials in production.
c. Incurred $360,000 of direct labor wages.
d. Incurred $120,000 of factory overhead.
e. Transferred $600,000 of work in process to finished goods.
f. Sold goods for $875,000.
g. Sold goods with a cost of $525,000.
h. Incurred $125,000 of selling expense.
i. Incurred $80,000 of administrative expense.
Using the information given, complete the following:
a. Prepare the January income statement for Digital Vibe Manufacturing Company.
b. Determine the Materials Inventory, Work in Process Inventory, and Finished Goods
Inventory balances at the end of the first month of operations.
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