
Concept explainers
Direct materials: Direct materials are the materials which are converted into finished products or goods. These materials convert into the finished good when the production is completed. All types of raw materials come under direct materials.
Direct labor: Direct labor is a labor who is directly involve in the production of finished goods. The cost of direct labor is considered as direct cost of production.
Manufacturing
Period cost: The cost which is incurred at the time of selling, handling and governing a product is called as period cost. It includes shipping cost, selling expenses and office expenses. It is shown in income statement.
To determine: The cost category of the given items.

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Chapter 19 Solutions
Accounting Principles - Standalone book
- For the current year ending December 31, Rutherford Manufacturing expects fixed costs of $4,200,000, a unit variable cost of $14.75, and a unit selling price of $19.25. A) Compute the anticipated break-even sales (in units). B) Compute the sales (in units) required to realize income from operations of $650,000.arrow_forwardSubject: general accountingarrow_forwardwhat is the inventory turnover ratio?arrow_forward
- How many units must be sold to achieve this goal?arrow_forwardSummit Industrial forecasts that total overhead for the current year will be $8,500,000 and that total machine hours will be 150,000 hours. Year-to-date, the actual overhead is $5,600,000, and the actual machine hours are 75,000 hours. If Summit Industrial uses a predetermined overhead rate based on machine hours for applying overhead, what is the overhead rate? a. $50 per machine hour b. $65 per machine hour c. $56.67 per machine hour d. $45 per machine hourarrow_forwardAccounting problem with solutionarrow_forward
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