Manufacturing Costs : Manufacturing cost is the sum of costs of all resources consumed in the process of manufacturing a product. To indicate whether the cost incurredbyPC Works is classified as direct materials, direct labor, manufacturing overhead, selling or an administrative cost respectively.

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Chapter 1, Problem 2E

To determine

Manufacturing Costs: Manufacturing cost is the sum of costs of all resources consumed in the process of manufacturing a product.

To indicate whether the cost incurredbyPC Works is classified as direct materials, direct labor, manufacturing overhead, selling or an administrative cost respectively.

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Classifying Manufacturing Costs The PC Works assembles custom computers from components supplied by various manufacturers. The company is very small and its assembly shop and retail sales store are housed in a single facility in a Redmond, Washington, industrial park. Listed below are some of the costs that are incurred at the company. Required: For each cost, indicate whether it would most likely be classified as direct materials, direct labor, manufacturing overhead, selling, or an administrative cost. 1. The cost of a hard drive installed in a computer. 2. The cost of advertising in the Puget Sound Computer User newspaper. 3. The wages of employees who assemble computers from components. 4. Sales commissions paid to the company’s salespeople. 5. The salary of the assembly shop’s supervisor. 6. The salary of the company’s accountant. 7. Depreciation on equipment used to test assembled computers before release to customers. 8. Rent on the facility in the industrial park.

The PC Works assembles custom computers from components supplied by various manufacturers. Thec ompany is very small and its assembly shop and retail sales store are housed in a single facility in a Redmond,Washington, industrial park. Listed below are some of the costs that are incurred at the company.Required:For each cost, indicate whether it would most likely be classified as direct labor, direct materials, manufacturing overhead, selling, or an administrative cost.1. The cost of a hard drive installed in a computer.2. The cost of advertising in the Puget Sound Computer User newspaper.3. The wages of employees who assemble computers from components.4. Sales commissions paid to the company’s salespeople.5. The wages of the assembly shop’s supervisor.6. The wages of the company’s accountant.7. Depreciation on equipment used to test assembled computers before release to customers.8. Rent on the facility in the industrial park.

Hummer Company uses manufacturing cells to produce its products (a cell is a manufacturing unit dedicated to the production of subassemblies or products). One manufacturing cell produces small motors for lawn mowers. Suppose that the motor manufacturing cell is the cost object. Assume that all or a portion of the following costs must be assigned to the cell. Required: Classify each of the costs as a direct cost or an indirect cost to the motor manufacturing cell. a. Salary of cell supervisor b. Power to heat and cool the plant in which the cell is located c. Materials used to produce the motors d. Maintenance for the cell's equipment (provided by the maintenance department) e. Labor used to produce motors f. Cafeteria that services the plant's employees g. Depreciation on the plant h. Depreciation on equipment used to produce the motors i. Ordering costs for materials used in…

Answer 2

Question

Chapter 1, Problem 2E

To determine

Manufacturing Costs: Manufacturing cost is the sum of costs of all resources consumed in the process of manufacturing a product.

To indicate whether the cost incurredbyPC Works is classified as direct materials, direct labor, manufacturing overhead, selling or an administrative cost respectively.

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Answer 3

Question

Chapter 1, Problem 2E

To determine

Manufacturing Costs: Manufacturing cost is the sum of costs of all resources consumed in the process of manufacturing a product.

To indicate whether the cost incurredbyPC Works is classified as direct materials, direct labor, manufacturing overhead, selling or an administrative cost respectively.

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Answer 4

Question

Chapter 1, Problem 2E

To determine

Manufacturing Costs: Manufacturing cost is the sum of costs of all resources consumed in the process of manufacturing a product.

To indicate whether the cost incurredbyPC Works is classified as direct materials, direct labor, manufacturing overhead, selling or an administrative cost respectively.

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Answer 5

Chapter 1, Problem 2E

To determine

Manufacturing Costs: Manufacturing cost is the sum of costs of all resources consumed in the process of manufacturing a product.

To indicate whether the cost incurredbyPC Works is classified as direct materials, direct labor, manufacturing overhead, selling or an administrative cost respectively.

Answer 6

Chapter 1, Problem 2E

To determine

Manufacturing Costs: Manufacturing cost is the sum of costs of all resources consumed in the process of manufacturing a product.

To indicate whether the cost incurredbyPC Works is classified as direct materials, direct labor, manufacturing overhead, selling or an administrative cost respectively.

Answer 7

Chapter 1, Problem 2E

To determine

Manufacturing Costs: Manufacturing cost is the sum of costs of all resources consumed in the process of manufacturing a product.

To indicate whether the cost incurredbyPC Works is classified as direct materials, direct labor, manufacturing overhead, selling or an administrative cost respectively.

Answer 8

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Answer 9

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Answer 10

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Answer 11

Ch. 1 - What are the three major types of product costs in...Ch. 1 - Define the following: (a) Direct materials, (b)...Ch. 1 - Explain the difference between a product cost and...Ch. 1 - Distinguish between (a) a variable cost, (b) a...Ch. 1 - What effect does an increase in the activity level...Ch. 1 - Define the following terms: (a) Costbehavior and...Ch. 1 - What is meant by an activity base when dealing...Ch. 1 - Managers often assume a strictly linear...Ch. 1 - Distinguish between discretionary fixed costs and...Ch. 1 - Does the concept of the relevant range apply to...

Manufacturing Costs : Manufacturing cost is the sum of costs of all resources consumed in the process of manufacturing a product. To indicate whether the cost incurredbyPC Works is classified as direct materials, direct labor, manufacturing overhead, selling or an administrative cost respectively.

Solution Summary: The author explains that manufacturing costs are the sum of costs of all resources consumed in the process of manufacturing a product.

Manufacturing Costs: Manufacturing cost is the sum of costs of all resources consumed in the process of manufacturing a product.

To indicate whether the cost incurredbyPC Works is classified as direct materials, direct labor, manufacturing overhead, selling or an administrative cost respectively.

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Chapter 1 Solutions

Manufacturing Costs : Manufacturing cost is the sum of costs of all resources consumed in the process of manufacturing a product. To indicate whether the cost incurredbyPC Works is classified as direct materials, direct labor, manufacturing overhead, selling or an administrative cost respectively.

Solution Summary: The author explains that manufacturing costs are the sum of costs of all resources consumed in the process of manufacturing a product.

Manufacturing Costs: Manufacturing cost is the sum of costs of all resources consumed in the process of manufacturing a product. To indicate whether the cost incurredbyPC Works is classified as direct materials, direct labor, manufacturing overhead, selling or an administrative cost respectively.

Want to see the full answer?

Chapter 1 Solutions

Manufacturing Costs: Manufacturing cost is the sum of costs of all resources consumed in the process of manufacturing a product.

To indicate whether the cost incurredbyPC Works is classified as direct materials, direct labor, manufacturing overhead, selling or an administrative cost respectively.