Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 10, Problem 2E
Exercise 1-2A Identifying product versus selling, general, and administrative (SG&A) costs
Required
Indicate whether each of the following costs should be classified as a product cost or as an SG&A cost in accordance with GAAP:
a. Direct materials used in a manufacturing company.
b. Indirect materials used in a manufacturing company.
c. Salaries of employees working in the accounting department.
d. Commissions paid to sales staff.
e. Interest on the mortgage for the company’s corporate headquarters.
f. Indirect labor used to manufacture inventory.
g. Attorney’s fees paid to protect the company from frivolous lawsuits.
h. Research and development costs incurred to create new drugs for a pharmaceutical company.
i. The cost of secretarial supplies used in a doctor’s office.
j.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
• (1) Manufacturing costs are regarded as expenses of the current period and are expensed when incurred (2) raw materials inventory refers to the direct materials on hand and available for use in the manufacturing process.
a. BOTH statements are TRUE
b. 1st statement TRUE
c. statement FALSE
d. BOTH statements are FALSE
Exercise 2-27 Statement of comprehensive Income and schedule of cost of goods manufactured.
The Howell Corporation has the following account balances (all in millions):
For Specific Date
Direct Materials, January 01, 2019 $18
Work in process, January 01, 2019 12
Finished Goods, January 01, 2019 84
Direct Materials, December 31, 2019 24
Work in Process, December 31, 2019 6
Finished Goods, December 31, 2019 66
For the Year 2019
Purchased of Direct Materials $390
Direct Manufacturing Labour 120
Depreciation, - Plant, Building, and Equipment 96
Plant Supervisory Salaries 6
Miscellaneous Plant Overhead 42
Revenues 1140
Marketing, Distribution and Customer Service Cost 288
Plant Supplies Used 12
Plant Utilities 36
Indirect Manufacturing Labour 72
Required:
Prepare a statement of Comprehensive Income and a supporting schedule of goods manufactured for…
Distinguish between manufacturing & non-manufacturing overhead (product versus period costs)2) Classify costs as prime costs or conversion costs3) Prepare a statement of cost of goods manufactured, clearly showing total manufacturing costs &total manufacturing costs to account for.4) Prepare an income statement for a manufacturing entity, clearly showing Cost of Goods Sold.5) Explain the difference between the income statements of a merchandiser & a manufacturer
Chapter 10 Solutions
Survey Of Accounting
Ch. 10 - 1. What are some differences between financial and...Ch. 10 - 2. What does the value-added principle mean as it...Ch. 10 - 4. How does product costing used in financial...Ch. 10 - 5. What does the statement costs can be assets or...Ch. 10 - 6. Why are the salaries of production workers...Ch. 10 - 7. How do product costs affect the financial...Ch. 10 - 8. What is an indirect cost? Provide examples of...Ch. 10 - 9. How does a product cost differ from a selling,...Ch. 10 - 10. Why is cost classification important to...Ch. 10 - 11. What is cost allocation? Give an example of a...
Ch. 10 - 13. What are some of the common ethical conflicts...Ch. 10 - 14. What costs should be considered in determining...Ch. 10 - 15. What is a just-in-time (JIT) inventory system?...Ch. 10 - Prob. 14QCh. 10 - Prob. 15QCh. 10 - Prob. 16QCh. 10 - Prob. 17QCh. 10 - Prob. 18QCh. 10 - Prob. 19QCh. 10 - Prob. 1ECh. 10 - Exercise 1-2A Identifying product versus selling,...Ch. 10 - Prob. 3ECh. 10 - Prob. 4ECh. 10 - Prob. 5ECh. 10 - Exercise 1-6A Identifying product versus SGA costs...Ch. 10 - LO 1-3 Exercise 1-7A Recording product versus SGA...Ch. 10 - Prob. 8ECh. 10 - LO 1-4 Exercise 1-9A Upstream, midstream, and...Ch. 10 - Prob. 10ECh. 10 - Prob. 11ECh. 10 - Prob. 12ECh. 10 - Prob. 13ECh. 10 - Cost of goods manufactured and sold The following...Ch. 10 - Prob. 15ECh. 10 - Exercise 1-14A Using JIT to minimize waste and...Ch. 10 - Prob. 17ECh. 10 - Prob. 18ECh. 10 - Prob. 19ECh. 10 - Prob. 20ECh. 10 - Problem 1-19A Characteristics of financial versus...Ch. 10 - Prob. 22PCh. 10 - Problem 1-21A Effect of product versus period...Ch. 10 - Problem 1-22A Product versus SGA costs The...Ch. 10 - Prob. 25PCh. 10 - Prob. 26PCh. 10 - Prob. 27PCh. 10 - Prob. 28PCh. 10 - Prob. 29PCh. 10 - Prob. 30PCh. 10 - Prob. 31PCh. 10 - Prob. 32PCh. 10 - Prob. 1ATCCh. 10 - Prob. 2ATCCh. 10 - Prob. 3ATCCh. 10 - Prob. 4ATCCh. 10 - Ethical Dilemma Product cost versus selling and...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- LO.6 Largo Company is an engineering consulting business that uses the accrual method of accounting for its services. Mango Company is a manufacturer of nuts and bolts that also uses the accrual method to account for its sales. Each company has a personnel department. How should the cost of personnel operations be treated by each of the two companies? Hint: Consider whether the UNICAP rules apply.arrow_forwardREQUIRED:1. Prepare a schedule of cost of goods manufactured2. Prepare a schedule of cost of goods sold3. Prepare an income statementarrow_forward1.An accounting system used to forecast earnings. 2.A costing method that determines the overhead and indirect costs of related products and services. Identify and explain the costing methods ..Explain the pros and cons of both methods.arrow_forward
- Question#1 1. Identify whether each of the following is classified as a product cost or a period cost.______________ 1. Direct labor______________ 2. Direct materials______________ 3. Factory utilities______________ 4. Repairs to office equipment______________ 5. Property taxes on factory building______________ 6. Sales salaries Question#2 Indicate whether each of the following costs of a pencil manufacturer would be classified as direct materials (DM), direct labor (DL), or manufacturing overhead (MO).a. ____ Depreciation of pencil painting machineryb. ____ Lead inserted into pencilsc. ____ Factory utilitiesd. ____ Wages of assembly line workere. ____ Salary of supervisorf. ____ Factory machinery maintenanceg. ____ Woodh. ____ Eraser compound Question#3 Raynor Company has the following data:Direct labor $76,000Direct materials used 84,000Total manufacturing overhead 65,000Ending work in process 30,000Beginning work in process 45,000InstructionsCompute (a) total manufacturing costs…arrow_forwardRequirement 3. Calculate the cost of goods sold for each company Begin by calculating the cost of goods sold for Company A.arrow_forwardKindly answer questions 1-3: 1.) Discretionary costs are costs that must be incurred because of past decision, contractual agreement, and government regulations. a. true b. false 2.) Product costs: a. are always expensed in the same period in which they are incurred. b. are inventoriable costs. c. vary directly with changes in cost driver. d. are always charged to an asset account in the same period in which they are incurred. 3. Controllable costs are cost items which can be regulated depending on the level of management one is in. a. True b. False b. Falsearrow_forward
- Question 6.1 For each item listed, select the appropriate purpose of cost allocation from the list below. A purpose may be used more than once. A - To provide information for economic decisions B - To motivate managers and other employees C - To measure income and assets for reports to external parties D - To justify costs or compute reimbursement amounts Required To encourage simpler product design To cost inventories for reporting on a company's tax return To encourage the sales department to focus on high-margin products To evaluate a make or buy decision To cost inventories for the balance sheet To decide whether to add or delete a product line To decide on an appropriate selling price for a special-order product To cost a product at a fair price for government contractsarrow_forward1. Distinguish between financial and managerial accounting for (a) first users of reports, (b) types and frequency of reports, and (c) purpose of reports. 2. How are manufacturing costs classified?arrow_forwardStatement 1: Cost Accounting relates to the conventional costing methods and techniques in accumulating the cost of a product, process, project or service, including both product and period cost in accumulating cost.Statement 2: Cost Accounting aims to reflect the correct complete financial picture/information of the entity to the different shareholders. a. Statement 1 is False, Statement 2 is True b. Statement 1 is True, Statement 2 is False c. Both statements are true d. Both statements are falsearrow_forward
- Practice 2: a: Define standard costs. b: under what conditions should previously established standard costs be revised? c: explain why the determination of standard cost amounts should not be the sole responsibility of a company's cost accountant.arrow_forwardInstructions: (a) Prepare the cost of goods manufactured schedule. (b) Compute the cost of goods sold.arrow_forwardDistinguish between manufacturing & non-manufacturing overhead (product versus period costs) 2) Classify costs as prime costs or conversion costs 3) Prepare a statement of cost of goods manufactured, clearly showing total manufacturing costs & total manufacturing costs to account for. 4) Prepare an income statement for a manufacturing entity, clearly showing Cost of Goods Sold. 5) Explain the difference between the income statements of a merchandiser & a manufacturer Pro-Leather Company is a manufacturer of leather cases for tablets. The following information pertains to operations during the 2020 calendar year. Sales Revenue $14,275,000 Direct Factory Labor 3,952,600 Indirect Factory Labor 1,232,250 Total Depreciation 1 400,000 Total Utilities 525,000 Distribution & Customer Service Costs 76,800 Insurance on Plant & Equipment 585,000 Property Taxes 90,000 Administrative wages & salaries 1076,000…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT
Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
Individual Income Taxes
Accounting
ISBN:9780357109731
Author:Hoffman
Publisher:CENGAGE LEARNING - CONSIGNMENT
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
Job Costing and Spoilage | Topic 2 | Spoilage, Re-work, and Scrap; Author: Samantha Taylor;https://www.youtube.com/watch?v=VP55_W2oXic;License: CC-BY