Question

Your friend, Suzie Whitson, has designed a new type of outdoor toy that helps children learn basic concepts such as colors, numbers. and shapes. Suzie's product will target two groups: day care centers in warm climates and home school programs. Her company is Jiffy Jet and costs for last month follow: Factory rent Company advertising Wages paid to assembly workers Depreciation for salespersons' vehicles Screws Utilities for factory Assembly supervisor's salary Sandpaper President's salary Plastic tubing Paint Sales commissions Factory Insurance Depreciation on cutting machines Wages paid to painters $ 3.02 1.010 30.10 2,030 555 870 3.52 175 5,120 4,060 295 1.250 1,120 2.050 8,250 Assume that Suzie Whitson has decided to begin production of her outdoor children's toy Required: 1 and 2. Identify each of the preceding costs as either a product or a period cost. If the cost is a product cost decide whether it is for direct materials (DM), direct labor (DL), or manufacturing overhead (MOH) and also identify each of the preceding costs as variable or fixed cost

Answer 1

Factory rent: - -	$ 3,020	Product	MOH	Fixed
Company advertising : -	1,010	Period	NA	Variable
Wages paid to assembly workers : --	30,100	Product	DL	Variable
Depreciation for salespersons’ vehicles : -	2,030	Period	NA	Fixed
Screws : - -	555	Product	MOH	Variable
Utilities for factory: - -	870	Product	MOH	Variable
Assembly supervisor’s salary : --	3,520	Product	MOH	Fixed
Sandpaper : - -	175	Product	MOH	Variable
President’s salary: -	5,120	Period	NA	Fixed
Plastic tubing: - -	4,060	Product	DM	variable
Paint: - -	295	Product	MOH	Variable
Sales commissions: -	1,250	Period	NA	Variable
Factory insurance : - -	1,120	Product	MOH	fixed
Depreciation on cutting machines: - -	2,050	Product	MOH	Fixed
Wages paid to painters: - -	8250	Product	DL	Variable

Total Period cost	9410
Total Variable cost	46565
Total Fixed cost	16860