COST ACCOUNTING
16th Edition
ISBN: 9781323694008
Author: Horngren
Publisher: PEARSON C
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 2, Problem 2.33E
Inventoriable costs versus period costs. Each of the following cost items pertains to one of these companies: Best Buy (a merchandising-sector company), KitchenAid (a manufacturing-sector company), and HughesNet (a service-sector company):
- a. Cost of phones and computers available for sale in Best Buy’s electronics department
- b. Electricity used to provide lighting for assembly-line workers at a KitchenAid manufacturing plant
- c.
Depreciation on HughesNet satellite equipment used to provide its services - d. Electricity used to provide lighting for Best Buy’s store aisles
- e. Wages for personnel responsible for quality testing of the KitchenAid products during the assembly process
- f. Salaries of Best Buy’s marketing personnel planning local-newspaper advertising campaigns
- g. Perrier mineral water purchased by HughesNet for consumption by its software engineers
- h. Salaries of HughesNet area sales managers
- i. Depreciation on vehicles used to transport KitchenAid products to retail stores
- 1. Distinguish between manufacturing-, merchandising-, and service-sector companies.
Required
- 2. Distinguish between inventoriable costs and period costs.
- 3. Classify each of the cost items (a−i) as an inventoriable cost or a period cost. Explain your answers.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Each of the following cost items pertains to one of thesecompanies: General Electric(a manufacturing-sector company), Safeway (a merchandising-sector company),and Google (a service-sector company):a. Perrier mineral water purchased by Safeway for sale to its customersb. Electricity used to provide lighting for assembly-line workers at a General Electricrefrigerator assembly plantc. Depreciation on Google’s computer equipment used to update directories of Websitesd. Electricity used to provide lighting for Safeway’s store aislese. Depreciation on General Electric’s computer equipment used for quality testing ofrefrigerator components during the assembly processf. Salaries of Safeway’s marketing personnel planning local-newspaper advertisingcampaignsg. Perrier mineral water purchased by Google for consumption by its softwareengineersh. Salaries of Google’s marketing personnel selling banner advertisingRequired:1. Distinguish between manufacturing-, merchandising-, and…
Q. Each of the following cost items pertains to one of these companies: General Electric (a manufacturing-sector company), Safeway (a merchandising-sector company), and Google (a service-sector company):
a. Perrier mineral water purchased by Safeway for sale to its customersb. Electricity used to provide lighting for assembly-line workers at a General Electric refrigerator assembly plantc. Depreciation on Google’s computer equipment used to update directories of Web sitesd. Electricity used to provide lighting for Safeway’s store aislese. Depreciation on General Electric’s computer equipment used for quality testing of refrigerator components during the assembly processf. Salaries of Safeway’s marketing personnel planning local-newspaper advertising campaignsg. Perrier mineral water purchased by Google for consumption by its software engineersh. Salaries of Google’s marketing personnel selling banner advertising
Required: Just Classify each of the cost items (a–h) as an inventoriable…
For each cost, indicate whether it would most likely be classified as direct materials, direct labor, manufacturing overhead, or selling and administrative.
(a) Amortization of patents on factory machine
(b) Components used to make product A
(Select one)
(Select one)
(Select one)
(c) Direct materials used
(d) Factory utilities
(e) Property taxes - factory.
(f) The cost of a hard-drive installed in a computer for a computer assembling company
(g) The wages of employees who assemble computers from components
(h) The wages of the company's accountant
(i) Wages of the product tester
() Wages to assembly line A workers
(Select one)
(Select one)
(Select one)
(Select one)
(Select one)
(Select one)
(Select one)
Chapter 2 Solutions
COST ACCOUNTING
Ch. 2 - Define cost object and give three examples.Ch. 2 - Define direct costs and indirect costs.Ch. 2 - Prob. 2.3QCh. 2 - Name three factors that will affect the...Ch. 2 - Define variable cost and fixed cost. Give an...Ch. 2 - What is a cost driver? Give one example.Ch. 2 - What is the relevant range? What role does the...Ch. 2 - Explain why unit costs must often be interpreted...Ch. 2 - Prob. 2.9QCh. 2 - What are three different types of inventory that...
Ch. 2 - Distinguish between inventoriable costs and period...Ch. 2 - Define the following: direct material costs,...Ch. 2 - Describe the overtime-premium and idle-time...Ch. 2 - Define product cost. Describe three different...Ch. 2 - What are three common features of cost accounting...Ch. 2 - Prob. 2.16MCQCh. 2 - Comprehensive Care Nursing Home is required by...Ch. 2 - Frisco Corporation is analyzing its fixed and...Ch. 2 - Year 1 financial data for the ABC Company is as...Ch. 2 - The following information was extracted from the...Ch. 2 - Computing and interpreting manufacturing unit...Ch. 2 - Direct, indirect, fixed, and variable costs....Ch. 2 - Classification of costs, service sector. Market...Ch. 2 - Classification of costs, merchandising sector....Ch. 2 - Classification of costs, manufacturing sector. The...Ch. 2 - Variable costs, fixed costs, total costs. Bridget...Ch. 2 - Variable and Fixed Costs. Consolidated Motors...Ch. 2 - Variable costs, fixed costs, relevant range. Gummy...Ch. 2 - Prob. 2.29ECh. 2 - Cost drivers and functions. The representative...Ch. 2 - Total costs and unit costs, service setting....Ch. 2 - Total and unit cost, decision making. Gayles...Ch. 2 - Inventoriable costs versus period costs. Each of...Ch. 2 - Computing cost of goods purchased and cost of...Ch. 2 - Cost of goods purchased, cost of goods sold, and...Ch. 2 - Flow of Inventoriable Costs. Renkas Heaters...Ch. 2 - Cost of goods manufactured, income statement,...Ch. 2 - Cost of goods manufactured, income statement,...Ch. 2 - Income statement and schedule of cost of goods...Ch. 2 - Interpretation of statements (continuation of...Ch. 2 - Income statement and schedule of cost of goods...Ch. 2 - Terminology, interpretation of statements...Ch. 2 - Labor cost, overtime, and idle time. David...Ch. 2 - Missing records, computing inventory costs. Ron...Ch. 2 - Comprehensive problem on unit costs, product...Ch. 2 - Prob. 2.46PCh. 2 - Cost classification; ethics. Paul Howard, the new...Ch. 2 - Prob. 2.48P
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
- Indicate whether the following costs of Procter & Gamble, a maker of consumer products, would be classified as direct materials cost, direct labor cost, or factory overhead cost:a. Resins for body wash productsb. Scents and fragrances used in making soaps and detergentsc. Plant manager salary for the Iowa City, Iowa, plantd. Depreciation on the Auburn, Maine, manufacturing plante. Depreciation on assembly line in the Mehoopany, Pennsylvania, paper products plantf. Maintenance suppliesg. Packaging materials, which are a significant portion of the total product costh. Wages of production line employees at the Pineville, Louisiana, soap and detergent planti. Wages paid to Packaging Department employees in the Bear River City, Utah, paper products plantj. Salary of process engineersarrow_forwardValue chain and classification of costs, computer company. Dell Computer incurs the following costs:a. Utility costs for the plant assembling the Latitude computer line of productsb. Distribution costs for shipping the Latitude line of products to a retail chainc. Payment to David Newbury Designs for design of the XPS 2-in-1 laptopd. Salary of computer scientist working on the next generation of serverse. Cost of Dell employees’ visit to a major customer to demonstrate Dell’s ability to interconnect withother computersf. Purchase of competitors’ products for testing against potential Dell productsg. Payment to business magazine for running Dell advertisementsh. Cost of cartridges purchased from outside supplier to be used with Dell printersarrow_forwardWithin the accounting system of a group of companies, the following types of expenses are incurred. Complete the following table by placing each expense in the correct cost classification. Reference Number Types of expenses 1 Costs of opening a new facility 2 Costs of conducting business in a new location or with a new class of customer (including costs of staff training) 3 Costs of site preparation 4 Costs of testing whether the asset is functioning properly 5 Electrical installation costs 6 Costs of dismantling and removing the item and restoring the site on which it is located 7 Administration costs 8 Import duty of an imported machine 9 Purchase of a five-year maintenance contract with plant 10 Legal fees for sales and purchase agreement for acquisition of land 11 Interest on loan on a self constructed property after the asset is ready for use 12 Architect fees incurred for self constructed building 13 General overheads incurred for self…arrow_forward
- E. Identify which of the following costs of a product manufacturer would be included in inventories: • Salaries of assembly line workers • Raw materials • Salary of factory foreman ● Heating cost for the factory • Miscellaneous supplies used in production process ● Salary of the CEO • Costs to ship raw materials from the supplier to the factory • Electricity cost for the factory • Salaries of the sales team Depreciation of factory machines Property taxes on factory building • Discounts for early payment of raw material purchases • Salaries of the factory's janitorial staff ● ●arrow_forwardGive me answerarrow_forwardClassifying Costs as Materials, Labor, or Factory Overhead Indicate whether the following costs of Procter & Gamble (PG), a maker of consumer products, would be classified as direct materials cost, direct labor cost, or factory overhead cost: Cost Classification a. Depreciation on assembly line equipment in the Mehoopany, Pennsylvania, paper products plant b. Licensing payments for use of Disney characters on children products c. Maintenance supplies d. Packaging materials e. Paper used in bath tissue f. Plant manager salary for the Iowa City, Iowa, plant g. Resins for body wash products h. Salary of process engineers I. Scents and fragrances used in making soaps and detergents j. Wages of production line employees at the Pineville, Louisiana, soap and detergent plantarrow_forward
- Conversion costs include all of the following except: A. wages of production workers B. depreciation on factory equipment C. factory utilities D. direct materials purchasedarrow_forwardIndicate whether the following costs of Procter Gamble (PG), a maker of consumer products, would be classified as direct materials cost, direct labor cost, or factory overhead cost: a. Depreciation on assembly line equipment in the Mehoopany, Pennsylvania, paper products plant b. Licensing payments for use of Disney characters on children products c. Maintenance supplies d. Packaging materials e. Paper used in bath tissue f. Plant manager salary for the Iowa City, Iowa, plant g. Resins for body wash products h. Salary of process engineers i. Scents and fragrances used in making soaps and detergents j. Wages of production line employees at the Pineville, Louisiana, soap and detergent plantarrow_forwardClassifying costs as factory overhead Which of the following items are properly classified as part of factory overhead for Caterpillar? a. Amortization of patents on new assembly process b.Consultant fees for a study of production line employee productivity C. Depreciation on Peoria. Illinois, headquarters building d.Factory supplies used in the Morganton. North Carolina, engine parts plant e.Interest expense on debt f. Plant manager's salary at Aurora, Illinois, manufacturing plant g.Properly taxes on the Danville, Kentucky, tractor tread plant h.Sales incentive fees to dealers i. Steel plate j. Vice president of finance's salaryarrow_forward
- What is the net income for the year if the net revenue from by-product is treated as deduction from the cost of goods sold? Group of answer choices d. P118,000 b. P230,000 a. P200,000 c. P218,000arrow_forwardKk.199.arrow_forwardWhich one of the following is not an example of a committed fixed cost? None of the given answers. O a. O b. The property taxes of the factory plant. Ос. The cost of the accounting system of the company. d. O d. The salary of the deputy manager of customer call center. O e. The depreciation cost of the Headquarters offices.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Survey of Accounting (Accounting I)AccountingISBN:9781305961883Author:Carl WarrenPublisher:Cengage Learning
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
Survey of Accounting (Accounting I)
Accounting
ISBN:9781305961883
Author:Carl Warren
Publisher:Cengage Learning
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
Cost Accounting - Definition, Purpose, Types, How it Works?; Author: WallStreetMojo;https://www.youtube.com/watch?v=AwrwUf8vYEY;License: Standard YouTube License, CC-BY