The following information has been extracted from the cost accounting information system database for Victoria Furnitures Ltd. The company manufactures different types of furniture’s, including tables; The company manufactured 1,000 tables during the year 2020. Cost Description & Amount 1.Cost of the wood that was used in manufacturing the tables. 10,000,000 2.Labour cost-For the workers who were involved in manufacture & assembly of Chairs and other types of furniture during the year. 8,500,000 3.Annual Salary paid to a factory supervisor who supervised the manufacture & assembly of tables during the year. 3,800,000 4.The electricity cost incurred in the manufacture of the tables during the year 800,000 5. The Annual salary paid the CEO of the company. 10,000,000 6. The cost of advertising all the company’s products on social media per year. 6,500,000 7. Sales commission paid to the employees involved in marketing the tables during the year. 3,000,000 8.The rent income that the company could earn if it rented out its factory space for a whole year instead of producing tables 5,000,000 Required: Using the information provided in the above table identify and explain how you classify each of the above costs according to the functional approach; Use the tables as the cost object in the classification of the costs
The following information has been extracted from the cost
database for Victoria Furnitures Ltd. The company manufactures different types of furniture’s,
including tables; The company manufactured 1,000 tables during the year 2020.
Cost Description & Amount
1.Cost of the wood that was used in manufacturing the tables. 10,000,000
2.Labour cost-For the workers who were involved in manufacture & assembly of
Chairs and other types of furniture during the year.
8,500,000
3.Annual Salary paid to a factory supervisor who supervised the manufacture &
assembly of tables during the year.
3,800,000
4.The electricity cost incurred in the manufacture of the tables during the year 800,000
5. The Annual salary paid the CEO of the company. 10,000,000
6. The cost of advertising all the company’s products on social media per year. 6,500,000
7. Sales commission paid to the employees involved in marketing the tables during
the year.
3,000,000
8.The rent income that the company could earn if it rented out its factory space for
a whole year instead of producing tables
5,000,000
Required:
Using the information provided in the above table identify and explain how you classify each of the above costs according to the functional approach; Use the tables as the cost object in the
classification of the costs
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