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Understanding the assignment manufactures computer chips. It incurs the following costs in manufacturing chips and in operating the sts is mpora. sider a company that company. 1. Plastic board used to mount the chip, $3.50 each. 2. Assembly worker pay of $15 per hour to attach chips to plastic board. 3. Salary for factory maintenance workers who maintain factory equipment. 4. Factory supervisor pay of $55,000 per year to supervise employees. 5. Salary paid to the chief financial officer, $95,000. 6. Advertising costs of $7,800 paid to promote ploducts. 7. Salespersons' commissions of S0.50 for each assembled chip sold. 8. Management has the option to rent the manufacturing plant to six local hospitals to store medical records instead of producing and assembling chips. 9. Real estate taxes paid on the factory, $14,500 Classify cach cost in the following table according to the categories listed in the table header. A cost can be classified under more than one category. For example, the plastic board used to mount chips is classified as a direct material product cost and as a direct unit cost. Answer Unit Cost Classification Period Costs Product Costs Sunk Opportunity Factory Overhead Direct Direct Cost Cost Cost Selling & Labor Administrative (Prime (Prime and (Conversion Conversion) Material Direct Indirect Cost) Cost) 2. 4561 89

Understanding the assignment manufactures computer chips. It incurs the following costs in manufacturing chips and in operating the sts is mpora. sider a company that company. 1. Plastic board used to mount the chip, $3.50 each. 2. Assembly worker pay of $15 per hour to attach chips to plastic board. 3. Salary for factory maintenance workers who maintain factory equipment. 4. Factory supervisor pay of $55,000 per year to supervise employees. 5. Salary paid to the chief financial officer, $95,000. 6. Advertising costs of $7,800 paid to promote ploducts. 7. Salespersons' commissions of S0.50 for each assembled chip sold. 8. Management has the option to rent the manufacturing plant to six local hospitals to store medical records instead of producing and assembling chips. 9. Real estate taxes paid on the factory, $14,500 Classify cach cost in the following table according to the categories listed in the table header. A cost can be classified under more than one category. For example, the plastic board used to mount chips is classified as a direct material product cost and as a direct unit cost. Answer Unit Cost Classification Period Costs Product Costs Sunk Opportunity Factory Overhead Direct Direct Cost Cost Cost Selling & Labor Administrative (Prime (Prime and (Conversion Conversion) Material Direct Indirect Cost) Cost) 2. 4561 89

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter6: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 1PB: Classify costs Cromwell Furniture Company manufactures sofas for distribution to several major...
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Understanding the assignment manufactures computer chips. It incurs the following costs in manufacturing chips and in operating the sts is mpora. sider a company that company. 1. Plastic board used to mount the chip, $3.50 each. 2. Assembly worker pay of $15 per hour to attach chips to plastic board. 3. Salary for factory maintenance workers who maintain factory equipment. 4. Factory supervisor pay of $55,000 per year to supervise employees. 5. Salary paid to the chief financial officer, $95,000. 6. Advertising costs of $7,800 paid to promote ploducts. 7. Salespersons' commissions of S0.50 for each assembled chip sold. 8. Management has the option to rent the manufacturing plant to six local hospitals to store medical records instead of producing and assembling chips. 9. Real estate taxes paid on the factory, $14,500 Classify cach cost in the following table according to the categories listed in the table header. A cost can be classified under more than one category. For example, the plastic board used to mount chips is classified as a direct material product cost and as a direct unit cost. Answer Unit Cost Classification Period Costs Product Costs Sunk Opportunity Factory Overhead Direct Direct Cost Cost Cost Selling & Labor Administrative (Prime (Prime and (Conversion Conversion) Material Direct Indirect Cost) Cost) 2. 4561 89
Transcribed Image Text:Understanding the assignment manufactures computer chips. It incurs the following costs in manufacturing chips and in operating the sts is mpora. sider a company that company. 1. Plastic board used to mount the chip, $3.50 each. 2. Assembly worker pay of $15 per hour to attach chips to plastic board. 3. Salary for factory maintenance workers who maintain factory equipment. 4. Factory supervisor pay of $55,000 per year to supervise employees. 5. Salary paid to the chief financial officer, $95,000. 6. Advertising costs of $7,800 paid to promote ploducts. 7. Salespersons' commissions of S0.50 for each assembled chip sold. 8. Management has the option to rent the manufacturing plant to six local hospitals to store medical records instead of producing and assembling chips. 9. Real estate taxes paid on the factory, $14,500 Classify cach cost in the following table according to the categories listed in the table header. A cost can be classified under more than one category. For example, the plastic board used to mount chips is classified as a direct material product cost and as a direct unit cost. Answer Unit Cost Classification Period Costs Product Costs Sunk Opportunity Factory Overhead Direct Direct Cost Cost Cost Selling & Labor Administrative (Prime (Prime and (Conversion Conversion) Material Direct Indirect Cost) Cost) 2. 4561 89
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