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Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773

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BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
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The accountant in a factory that produces biscuits for fast-food restaurants wants to assign costs to boxes of biscuits. Which of the following costs can be traced directly to boxes of biscuits?

  1. a. The cost of flour and baking soda
  2. b. The wages of the mixing labor
  3. c. The cost of the boxes
  4. d. The cost of packing labor
  5. e. All of these.

To determine

Identify the cost that can be traced to the boxes of biscuits directly.

Explanation

Assigning Costs:

Assigning costs can be defined as a way the costs are allocated to the cost objects. It represents the reason for the amount of money spent by the company.

a.

The cost of flour and baking soda will be considered as a direct material f in the production of biscuits. The cost of direct materials can be traced directly to the biscuit boxes. Therefore, this option is valid but in correct.

b.

The wages of the mixing labor will be considered as direct labor in the production of biscuits. The cost of direct labor can be traced directly to the biscuit boxes...

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