A firm has to pay a $0.50 per unit royalty to the inventor of a device which it manufactures and sells. The royalty charge would be classified in the firm’s accounts as a: Selling expense Direct expense Production overhead Administrative overhead
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A firm has to pay a $0.50 per unit royalty to the inventor of a device which it manufactures and sells. The royalty charge would be classified in the firm’s accounts as a:
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- A company has to pay Rs. 10,000 per unit royalty to the designer of a product which it manufactures and sells. The royalty charge would be classified as? a.Direct expense b.Production overhead c.Administrative overhead d.Selling overheadRoyalty on production is classified as? a. Selling overheads O b. Factory overheads C.Office heads Od. Direct expenseClassifying 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 salary
- An example of a nonproduction cost is a.wages paid to assembly-line employees. b.manufacturing supplies. c.the treasurer's salary. d.insurance on manufacturing facilities.What if the company actually spent $95,000 on overhead costs? What causes a company to have overapplied or underapplied overhead? Is this a situation that would eventually need to be resolved? If so, how?In addition to wages, direct manufacturing labor-related costs include pension contributions of $0.40 per hour, worker’s compensation insurance of $0.10 per hour, employee medical insurance of $0.50 per hour, and Social Security taxes. Assume that as of January 1, 2018, the Social Security tax rates are 7.5% for employers and 7.5% for employees. The cost of employee benefits paid by DeWitt on its direct manufacturing employees is treated as a direct manufacturing labor cost. DeWitt has a labor contract that calls for a wage increase to $12 per hour on April 1, 2018. New laborsaving machinery has been installed and will be fully operational by March 1, 2018. DeWitt expects to have 16,000 frames on hand at December 31, 2017, and it has a policy of carrying an end-of-month inventory of 100% of the following month’s sales plus 50% of the second following month’s sales. Q1. What actions has the budget process prompted DeWitt’s management to take?
- In addition to wages, direct manufacturing labor-related costs include pension contributions of $0.40 per hour, worker’s compensation insurance of $0.10 per hour, employee medical insurance of $0.50 per hour, and Social Security taxes. Assume that as of January 1, 2018, the Social Security tax rates are 7.5% for employers and 7.5% for employees. The cost of employee benefits paid by DeWitt on its direct manufacturing employees is treated as a direct manufacturing labor cost. DeWitt has a labor contract that calls for a wage increase to $12 per hour on April 1, 2018. New laborsaving machinery has been installed and will be fully operational by March 1, 2018. DeWitt expects to have 16,000 frames on hand at December 31, 2017, and it has a policy of carrying an end-of-month inventory of 100% of the following month’s sales plus 50% of the second following month’s sales. Q1. Prepare a production budget and a direct manufacturing labor cost budget for DeWitt Company by month and for the first…Sundland Company has the following labor costs: Factory-Gross wages 540000, Factory-Net wages 440000, Employer Payrol Taxes Payable 54000. The entry to record the cost of factory labor and the associated payroll tax expense will include a debit to Factory Labor for?Below is a table showing the various costs incurred by various companies. In each column, indicate the proper classification of these costs. Write NA if not applicable. Cost Manufacturing/Product (M) or Non-Manufacturing/Period (NM) Direct Materials (DM), Direct Labor (DL) or Factory Overhead (FOH) General and Administrative (GA) or Marketing and Selling (MS) g. Maintenance cost of the production equipment h. Advertising and promotion expense i. Shipping cost of product sold j. Salaries of plant supervisor k. Interest on bank loan l. Property tax on the production plant m. Commissions paid to sales personnel n. Salaries of the executive staff o. Car leases for sales agents p. Electricity to run machineries in a lumber yard q. Food for company banquet r. Sugar in a bakeshop s. Chips…
- Below is a table showing the various costs incurred by various companies. In each column, indicate the proper classification of these costs. Write NA if not applicable. Cost Manufacturing/Product (M) or Non-Manufacturing/Period (NM) Direct Materials (DM), Direct Labor (DL) or Factory Overhead (FOH) General and Administrative (GA) or Marketing and Selling (MS) g. Maintenance cost of the production equipment h. Advertising and promotion expense i. Shipping cost of product sold j. Salaries of plant supervisor k. Interest on bank loan l. Property tax on the production plantRyan Corporation incurred the following costs while manufacturing its product. Materials used in product Depreciation on plant Property taxes on store Labor costs of assembly-line workers Factory supplies used Instructions $100,000 60,000 7,500 110,000 13,000 Advertising expense Property taxes on plant Delivery expense Sales commissions Salaries paid to sales clerks $45,000 14,000 21,000 35,000 50,000 (a) Identify each of the above costs as direct materials, direct labor, manufacturing overhead, or period costs. (b) Explain the basic difference in accounting for product costs and period costs.A company currently pays $5 per unit to buy a key part for a product it manufactures. It can make the part for $1.50 per unit for direct materials and $2.50 per unit for direct labor. The company normally allocates overhead costs at the rate of 50% of direct labor. Incremental overhead costs to make this part are $0.75 per unit. Should the company make or buy the part?
