TP2. LO 2.2This list contains costs that various organizations incur; they fall into three categories: direct materials (DM), direct labor (DL), or overhead (OH).7Classify each of these items as direct materials, direct labor, or overhead.Glue used to attach labels to bottles containing a patented medicine.Compressed air used in operating paint sprayers for Student Painters, a company that paints houses and apartments.Insurance on a factory building and equipment.A production department supervisor’s salary.Rent on factory machinery.Iron ore in a steel mill.Oil, gasoline, and grease for forklift trucks in a manufacturing company’s warehouse.Services of painters in building construction.Cutting oils used in machining operations.Cost of paper towels in a factory employees’ washroom.Payroll taxes and fringe benefits related to direct labor.The plant electricians’ salaries.Crude oil to an oil refinery.Copy editor’s salary in a book publishing company.Assume your classifications could be challenged in a court case. Indicate to your attorneys which of your answers for part a might be successfully disputed by the opposing attorneys and why. In which answers are you completely confident?

Answered: Image /qna-images/answer/4be803ed-ed10-41a4-8491-9f941843e45c.jpg

Answered: LO 2.2This list contains costs that…

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

Concept explainers

Question

TP2.

LO 2.2This list contains costs that various organizations incur; they fall into three categories: direct materials (DM), direct labor (DL), or overhead (OH).⁷

Classify each of these items as direct materials, direct labor, or overhead.
1. Glue used to attach labels to bottles containing a patented medicine.
2. Compressed air used in operating paint sprayers for Student Painters, a company that paints houses and apartments.
3. Insurance on a factory building and equipment.
4. A production department supervisor’s salary.
5. Rent on factory machinery.
6. Iron ore in a steel mill.
7. Oil, gasoline, and grease for forklift trucks in a manufacturing company’s warehouse.
8. Services of painters in building construction.
9. Cutting oils used in machining operations.
10. Cost of paper towels in a factory employees’ washroom.
11. Payroll taxes and fringe benefits related to direct labor.
12. The plant electricians’ salaries.
13. Crude oil to an oil refinery.
14. Copy editor’s salary in a book publishing company.
Assume your classifications could be challenged in a court case. Indicate to your attorneys which of your answers for part a might be successfully disputed by the opposing attorneys and why. In which answers are you completely confident?

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 3 images

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