The PC Works assembles custom computers from components supplied by various manufacturers. The company is very small and its assembly shop and retail sales store are housed in a single facilityin a Redmond, Washington, industrial park. Listed below are some of the costs that are incurred at the company.Required:For each cost, indicate whether it would most likely be classified as direct labor, direct materials ,manufacturing overhead, selling, or an administrative cost.The cost of a hard drive installed in a computer.The cost of advertising in the Puget Sound Computer User newspaper.The wages of employees who assemble computers from components.Sales commissions paid to the company’s salespeople.The wages of the assembly shop’s supervisor.The wages of the company’s accountant.Depreciation on equipment used to test assembled computers before release to customers.8. Rent on the facility in the industrial park.

Manufacturing costs: Manufacturing cost is the sum of all resources consumed in the process of…

Answered: The PC Works assembles custom computers…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The PC Works assembles custom computers from components supplied by various manufacturers. The company is very small and its assembly shop and retail sales store are housed in a single facility

in a Redmond, Washington, industrial park. Listed below are some of the costs that are incurred at the company.

Required:

For each cost, indicate whether it would most likely be classified as direct labor, direct materials ,manufacturing overhead, selling, or an administrative cost.

The cost of a hard drive installed in a computer.
The cost of advertising in the Puget Sound Computer User newspaper.
The wages of employees who assemble computers from components.
Sales commissions paid to the company’s salespeople.
The wages of the assembly shop’s supervisor.
The wages of the company’s accountant.
Depreciation on equipment used to test assembled computers before release to customers.

8. Rent on the facility in the industrial park.

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