Question

Answer this question fully:

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	$	3,200
Company advertising		1,000
Wages paid to assembly workers		30,000
Depreciation for salespersons’ vehicles		2,000
Screws		500
Utilities for factory		900
Assembly supervisor’s salary		3,500
Sandpaper		150
President’s salary		6,000
Plastic tubing		4,200
Paint		250
Sales commissions		1,200
Factory insurance		1,000
Depreciation on cutting machines		2,000
Wages paid to painters		7,500

Assume that Suzie Whitson has decided to begin production of her outdoor children’s toy.

Required:
1 & 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.

	Costs Type of cost Cost head Cost classification 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

Answer 1

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I freed Ans: Costs | Type ofl. Cost. Cost head | Gosłclassifiation factory reut Product mot Company advertising Period NA | Vayable Wages Raid to assembly workers Product DL_ Variable Depreciation for salesperson Vehield period | NA T fixed Screws I Product mot Variable Utilities for factory Product mot Variable | Assembly Supervisor's salaryl Product MOH I fixed Sand paper - Product I Variable I Besident's salary period I NA Plastic | Product Variable Paint Product I Variable Sales Commissions I Period INA MOH Tubing Tom IDM . Variable I factory Insurance Depreciation on lutting machine Iwages paid to palwers I Product Product Product ___mo Н. mot fixed Hued LDL T Veniable