Solution:
Name of cost | Cost classification for: | |||
Predicting cost behavior | Manufacturers | Preparing financial statements | Decision making | |
Rental revenue forgone, $30,000 per year | none | none | none | Opportunity cost |
Direct material cost, $80 per unit | Variable | Direct material | Product cost | None |
Rental cost of warehouse, $500 per month | Fixed | none | Period cost | None |
Rental cost of equipment, $4,000 per month | Fixed | Manufacturing overhead | Product cost | None |
Direct labor cost, $60 per unit | Variable | Direct labor | Product cost | None |
Depreciation of the annex space, $8,000 per year | Fixed | Manufacturing overhead | Product cost | Sunk Cost |
Advertising cost, $50,000 per year | Fixed | none | Period cost | None |
Supervisor's Salary, $3,500 per month | Fixed | Manufacturing overhead | Product cost | None |
Electricity for machines, $1.20 per unit | Variable | Manufacturing overhead | Product cost | None |
Shipping cost, $9 per unit | Variable | none | Period cost | None |
Return earned on investment, $3,000 per year | none | none | none | Opportunity cost |
Exercise 2-12 Cost Classification [LO2-2, LO2-3, LO2-4, LO2-7] Wollogong Group Ltd. of New South Wales, Australia,...
Exercise 1-14 (Static) Cost Classification (L01-2, LO1-3, L01-4, L01-5) Wollogong Group Ltd. of New South Wales, Australia, acquired its factory building 10 years ago. For several years, the company has rented out a small annex attached to the rear of the building for $30,000 per year. The renter's lease will expire soon, and rather than renewing the lease, the company has decided to use the annex to manufacture a new product Direct materials cost for the new product will total...
Wollogong Group Ltd. of New South Wales, Australia, acquired its factory building 10 years ago. For several years, the company has rented out a small annex attached to the rear of the building for $30,000 per year. The renter's lease will expire soon, and rather than renewing the lease, the company has decided to use the annex to manufacture a new product. Direct materials cost for the new product will total $80 per unit. To have a place to store...
Wollogong Group Ltd of New South Wales, Australia, acquired its factory building 10 years ago. For several years, the company has rented out a small annex attached to the rear of the building for $30,000 per year . The renter's lease will expire soon, and rather than renewing the lease, the company has decided to use the annex to manufacture a new product Direct materials cost for the new product will total $30 per unit. To have a place to...
Wollogong Group Ltd. of New South Wales, Australia, acquired its factory building 10 years ago. For several years, the company has rented out a small annex attached to the rear of the building for $30,000 per year. The renter's lease will expire soon, and rather than renewing the lease, the company has decided to use the annex to manufacture a new product. Direct materials cost for the new product will total $80 per unit. To have a place to store...
Wollogong Group Ltd. of New South Wales, Australia, acquired its factory building 10 years ago. For several years, the company has rented out a small annex attached to the rear of the building for $30,000 per year. The renter's lease will expire soon, and rather than renewing the lease, the company has decided to use the annex to manufacture a new product Direct materials cost for the new product will total $80 per unit. To have a place to store...
Wollogong Group Ltd. of New South Wales, Australia, acquired its factory building about 10 years ago. For several years, the company has rented out a small annex attached to the rear of the building. The company has received a rental income of $30,000 per year on this space. The renter's lease will expire soon, and rather than renewing the lease, the company has decided to use the space itself to manufacture a new product. Direct materials cost for the new...
Wollogong Group Ltd. of New South Wales, Australia, acquired its factory building 10 years ago. For several years, the company has rented out a small annex attached to the rear of the building for $30,000 per year. The renter's lease will expire soon, and rather than renewing the lease, the company has decided to use the annex to manufacture a new product Direct materials cost for the new product will total $80 per unit. To have a place to store...
Wollogong Group Ltd. of New South Wales, Australia, acquired its factory building 10 years ago. For several years, the company has rented out a small annex attached to the rear of the building for $30,000 per year. The renter's lease will expire soon, and rather than renewing the lease, the company has decided to use the annex to manufacture a new product. to use the an Direct materials Direct materials cost for the new product will total $80 per unit....
Wollogong Group Ltd. of New South Wales, Australia, acquired its factory building 10 years ago. For several years, the company has rented out a small annex attached to the rear of the building for $30,000 per year. The renter's lease will expire soon, and rather than renewing the lease, the company has decided to use the annex to manufacture a new product Direct materials cost for the new product wil total $80 per unit. To have a place to store...
Wollogong Group Ltd of New South Wales, Australia, acquired its factory building 10 years ago. For several years, the company has rented out a small annex attached to the rear of the building for $30,000 per year. The renter's lease will expire soon, and rather than renewing the lease, the company has decided to use the annex to manufacture a new product Direct materials cost for the new product will total $80 per unit. To have a place to store...