Managerial Accounting: Tools for Business Decision Making
Managerial Accounting: Tools for Business Decision Making
7th Edition
ISBN: 9781118334331
Author: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Publisher: WILEY
Question
Chapter 1, Problem 1.4BE

(a)

To determine

Direct Material cost:

Direct material cost is the cost of the material which is directly involved in the production. It constitutes the major portion of the total cost of the finished product. For example: The cost of plastic is the direct material for manufacturing a bottle.

To indicate: Whether the cost of a windshield would be classified as direct materials, direct labor, or manufacturing overhead.

(b)

To determine

Direct Material cost:

Direct material cost is the cost of the material which is directly involved in the production. It constitutes the major portion of the total cost of the finished product. For example: The cost of plastic is the direct material for manufacturing a bottle.

To indicate: Whether the cost of an engine would be classified as direct materials, direct labor, or manufacturing overhead.

(c)

To determine

Direct Labor Cost:

Direct labor cost is the cost of the labor paid to the employees who are directly involved in converting the raw materials to the finished products. It constitutes the major portion of the total cost of the finished product. For example: Wages paid to the mechanic for repairing an automobile.

To indicate: Whether the cost of the wages of the assembly line worker would be classified as direct materials, direct labor, or manufacturing overhead.

(d)

To determine

Factory Overhead Cost:

Factory overhead cost is the cost other than the direct material cost, and the direct labor cost which is not directly involved in the production process of converting the raw materials to the finished products. If the direct material cost or direct labor cost does not constitute the major portion of the total cost of the finished product, then it may be classified as the factory overhead cost. For example: Cost of repairing, and maintaining factory equipment.

To indicate: Whether the cost of the depreciation of factory machinery would be classified as direct materials, direct labor, or manufacturing overhead.

(e)

To determine

Factory Overhead Cost:

Factory overhead cost is the cost other than the direct material cost, and the direct labor cost which is not directly involved in the production process of converting the raw materials to the finished products. If the direct material cost or direct labor cost does not constitute the major portion of the total cost of the finished product, then it may be classified as the factory overhead cost. For example: Cost of repairing, and maintaining factory equipment.

To indicate: Whether the cost of the factory machinery lubricants would be classified as direct materials, direct labor, or manufacturing overhead.

(f)

To determine

Direct Material cost:

Direct material cost is the cost of the material which is directly involved in the production. It constitutes the major portion of the total cost of the finished product. For example: The cost of plastic is the direct material for manufacturing a bottle.

To indicate: Whether the cost of the tires would be classified as direct materials, direct labor, or manufacturing overhead.

(g)

To determine

Direct Material cost:

Direct material cost is the cost of the material which is directly involved in the production. It constitutes the major portion of the total cost of the finished product. For example: The cost of plastic is the direct material for manufacturing a bottle.

To indicate: Whether the cost of the steering wheel would be classified as direct materials, direct labor, or manufacturing overhead.

(h)

To determine

Factory Overhead Cost:

Factory overhead cost is the cost other than the direct material cost, and the direct labor cost which is not directly involved in the production process of converting the raw materials to the finished products. If the direct material cost or direct labor cost does not constitute the major portion of the total cost of the finished product, then it may be classified as the factory overhead cost. For example: Cost of repairing, and maintaining factory equipment.

To indicate: Whether the salary of the painting supervisor would be classified as direct materials, direct labor, or manufacturing overhead.

Blurred answer
Students have asked these similar questions
Indicate whether each of the following costs of an automobile manufacturer would be classified as direct materials cost, direct labor cost, or factory overhead cost:a. Wheelsb. Glass used in the vehicle’s windshieldc. Wages of assembly line workerd. V8 automobile enginee. Depreciation of robotic assembly line equipmentf. Steering wheelg. Painting safety masks for employees working in the paint roomh. Salary of test driver
Indicate whether each of the following costs of an automobile manufacturer would be classified as direct materials cost, direct labor cost, or factory overhead cost: a) Depreciation of robotic assembly line equipment b) V8 automobile engine c) Steering wheel d) Wheels e) Painting safety masks for employees working in the paint room f) Salary of test driver g) Glass used in the vehicle's windshield h) Wages of assembly line worker   Note:  material and labor costs are directs costs that could be easily traced to a product.  Factory overhead costs are indirect costs that are not easily traced to a product and are generally used in the manufacturing process.
Classifying Costs as Materials, Labor, or Factory Overhead Indicate whether each of the following costs of an automobile manufacturer would be classified as direct materials cost, direct labor cost, or factory overhead cost: Cost Classification a.  Automobile engine   b.  Brake pads   c.  Depreciation of robotic assembly line equipment   d.  Glass for front and rear windshields   e.  Safety helmets and masks for assembly line workers   f.  Salary of quality control inspector   g.  Steering wheel   h.  Tires   i.  Wages of assembly line workers

Chapter 1 Solutions

Managerial Accounting: Tools for Business Decision Making

Ch. 1 - Tina Burke is confused about the differences...Ch. 1 - Identify the differences in the cost of goods sold...Ch. 1 - The determination of the cost of goods...Ch. 1 - Sealy Company has beginning raw materials...Ch. 1 - Tate Inc. has beginning work in process 26,000,...Ch. 1 - Using the data in Question 15, what are (a) the...Ch. 1 - In what order should manufacturing inventories be...Ch. 1 - How does the output of manufacturing operations...Ch. 1 - Discuss whether the product costing techniques...Ch. 1 - What is the value chain? Describe, in sequence,...Ch. 1 - What is an enterprise resource planning (HRP)...Ch. 1 - Why is product quality important for companies...Ch. 1 - Explain what is meant by balanced in the balanced...Ch. 1 - In what ways can the budgeting process create...Ch. 1 - What new rules were enacted under the...Ch. 1 - What is activity-based costing, and what are its...Ch. 1 - Distinguish between managerial and financial...Ch. 1 - Prob. 1.2BECh. 1 - Determine whether each of the following costs...Ch. 1 - Prob. 1.4BECh. 1 - Identify whether each of the following costs...Ch. 1 - Presented below are Rook Companys monthly...Ch. 1 - Francum Company has the following data: direct...Ch. 1 - In alphabetical order below are current asset...Ch. 1 - Presented below are incomplete manufacturing cost...Ch. 1 - Use the same data from BE1-9 above and the data...Ch. 1 - Prob. 1.11BECh. 1 - Prob. 1.1DICh. 1 - Identify managerial cost classifications. (LO 2),...Ch. 1 - The following information is available for Tomlin...Ch. 1 - Match the descriptions that follow with the...Ch. 1 - Justin Bleeber has prepared the following list of...Ch. 1 - Presented below is a list of costs and expenses...Ch. 1 - Trak Corporation incurred the following costs...Ch. 1 - Determine the total amount of various types of...Ch. 1 - Gala Company is a manufacturer of laptop...Ch. 1 - Prob. 1.6ECh. 1 - National Express reports the following costs and...Ch. 1 - Lopez Corporation incurred the following costs...Ch. 1 - An incomplete cost of goods manufactured schedule...Ch. 1 - Manufacturing cost data for Copa Company are...Ch. 1 - Incomplete manufacturing cost data for Horizon...Ch. 1 - Cepeda Corporation has the following cost records...Ch. 1 - Keisha Tombert, the bookkeeper for Washington...Ch. 1 - The following information is available for Aikman...Ch. 1 - University Company produces collegiate apparel....Ch. 1 - An analysis of the accounts of Roberts Company...Ch. 1 - McQueen Motor Company manufactures automobiles....Ch. 1 - The following is a list of terms related to...Ch. 1 - Prob. 1.1APCh. 1 - Bell Company, a manufacturer of audio systems,...Ch. 1 - Incomplete manufacturing costs, expenses, and...Ch. 1 - Prepare a cost of goods manufactured schedule, a...Ch. 1 - Empire Company is a manufacturer of smart phones....Ch. 1 - Prob. 1.1WPCh. 1 - Prob. 1.1BYPCh. 1 - Tenrack is a fairly large manufacturing company...Ch. 1 - Prob. 1.4BYPCh. 1 - The primary purpose of managerial accounting is to...Ch. 1 - As noted in this chapter, because of global...
Knowledge Booster
Similar questions
  • Assign each of the following expenses to either the machine cost pool or the factory cost pool: A. property taxes B. heat and air-conditioning C. electricity, machines D. plant depreciation E. electricity, plant F. machine maintenance wages
    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: 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 plant
    For apparel manufacturer Abercrombie Fitch, Inc. (ANF), classify each of the following costs as either a product cost or a period cost: a. Advertising expenses b. Chief financial officers salary c. Depreciation on office equipment d. Depreciation on sewing machines e. Fabric used during production f. Factory janitorial supplies g. Factory supervisors salaries h. Property taxes on factory building and equipment i. Oil used to lubricate sewing machines j. Repairs and maintenance costs for sewing machines k. Research and development costs l. Sales commissions m. Salaries of distribution center personnel n. Salaries of production quality control supervisors o. Travel costs of media relations employees p. Utility costs for office building q. Wages of sewing machine operators
  • 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) s. Chips in computer manufacturing shop       t. Wages of painters in a furniture manufacturing company       u. Wood in cabinet-making shop       v. Steel in machine fabrication shop       w. Property taxes of office building       x. Insurance of factory workers       y. Calculators used in the store outlet
    Presented below is a list of costs and expenses usually incurred by Barnum Corporation, a manufacturer of furniture, in its factory.Classify the below items into the following categories: (a) direct materials, (b) direct labor, and (c) manufacturing overhead.     Item   Category 1.   Salaries for assembly line inspectors.   select a category                                                            2.   Insurance on factory machines.   select a category                                                            3.   Property taxes on the factory building.   select a category                                                            4.   Factory repairs.   select a category                                                            5.   Upholstery used in manufacturing furniture.   select a category                                                            6.   Wages paid to assembly line workers.   select a category…
    a. Road Warrior Motor is a company that manufactures and sells cars. Indicate whether each of the following should be considered a product cost or a period cost for the company. If you identify the item as a product cost, also indicate whether it is a direct material cost, direct labor cost, or overhead cost. Write “1” under the correct answer. For example, the answer to item 0 is “product cost” and “overhead cost.” 0. Property taxes on factory building. 1. Cost of buying the metal needed to manufacture cars. 2. Depreciation on the furniture used in the sales showroom. 3. Cost of electricity used in the factories. 4. Salaries of factory workers who manufacture cars. 5. Salaries of factory security guards. 6. Salaries of office workers in the financial department. 7. Depreciation on the warehouse used to store raw materials. 8. Income taxes paid to the government.   b. The company manufactured 100 cars in January 2023 and has not sold any of them by the end of January. If the company…
    • SEE MORE QUESTIONS
    Recommended textbooks for you
  • 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
  • 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