Acc 400 Week 1 Textbook Essay

1057 Words Apr 5th, 2016 5 Pages
Week 1 Assignment from the textbook
Nancy Schwartz
January 25, 2016
Lee Kroll

Star Repairs Co. does all the repair work for a medium-sized manufacturer of handheld computer games. The games are sent directly to Star, and after the games are repaired, Star bills the gam manufacturer for cost plus a 20 percent markup. In the month of February, purchases of parts (replacement parts) by Star amounted to $97,000, the beginning of inventory of parts was $38,500, and the ending inventory of parts was $15,250. Payments to repair technicians during the month of February totaled $52,500. Overhead incurred was $121,000.

a. What was the cost of materials used for repair work during the month of February? $38,500 +
…show more content…
None (answer is direct manufacturing costs)

e. The amount debited at the time that the Manufacturing Overhead account is credited. Work in Process Inventory

f. The amount transferred from the Work in Process Inventory account to the Finished Goods Inventory Account. Cost of finished goods manufactured

g. Costs that are debited directly to expense accounts when the costs are incurred. Period costs

Into which of the three elements of manufacturing cost would each of the following be classified? (Direct Labor, Direct Materials, and Manufactured Overhead)

a. Tubing used in manufacturing bicycles Direct materials

b. Wages paid by an automobile manufacturer to employees who test-drive completed automobiles. Manufactured Overhead

c. Property taxes on machinery. Manufactured Overhead

d. Gold bullion used by a jewelry manufacturer Direct materials

e. Wages of assembly-line workers who package frozen food. Direct labor

f. Salary of plant superintendent. Manufactured Overhead

g. Electricity used in factory operations. Manufactured Overhead

h. Salary of a nurse in a factory first-aid station. Manufactured Overhead

Indicate whether each of the following should be considered a product cost or a period cost. If you identify the item as a product cost, also indicate whether it is a direct or an indirect cost. For example, the answer to item is “indirect product cost”. Begin