Question

Chapter 2 Cost Classification and Cost Behavior Heritage Company manufactures a beautiful bookcase that enjoys widespread popularity. The company has a backlog of orders that is large enough to keep production going indefinitely at the plant's full capacity of 4,000 bookcases per year. Annual cost data at full capacity follow: Direct materials used (wood and glass) Administrative office salaries Factory supervision Sales commissions Depreciation, factory building Depreciation, administrative office equipment Factory labor (cutting and assembly) Advertising Insurance, factory Property taxes, factory $430,000 $110,000 70,000 60,000 $105,000 $2,000 90,000 $100,000 $6,000 20,000 Required Enter the dollar amount of each cost item under the a ate headings Product Cost Period Cost Cost Itemm Direct Material Labor Direct ManufacturingSellingAdministrative Overhead Cost Cost Direct materials used a3s Administrative office alaries Fa Sales commissions Depreciation, factory buildin Depreciation, admin. office Factory labor (cutting and assembl Advertising Insurance, SU 131011 en taxes, facto

Answer 1

1) Classification

	Product Cost			Period cost
Cost item	Direct material	Direct labor	Manufacturing overhead	Selling cost	Administrative cost
Direct material used	430000
Administration office salaries					110000
Factory supervision			70000
Sales commission				60000
Depreciation factory building			105000
Depreciation administrative office equipment					2000
Factory labor		90000
Advertising				110000
insurance factory			6000
Property taxes factory			20000

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