Q:2 A The following costs are incurred by an electrical appliance manufacturer. Classify these costs as direct materials, direct labor, manufacturing overhead, selling, or administrative.
President’s salary. -------Administrative Cost of electrical wire used in making appliances. ------ Direct materials Cost of janitorial supplies (the janitors work in the factory). ------ Manufacturing overhead Wages of assembly-line workers. - - ---- Direct Labor Cost of promotional displays. - - - - - Selling Assembly-line supervisor’s salary. - - - - - Administrative Cost accountant’s salary (the accountant works in the factory). - - - - Administrative Cost of cleaner used to clean appliances when they are completed. - - - - - Direct Labor Cost of aluminum used for toasters. - - - - - Direct materials Cost of market research survey. - - - - - Selling |
Direct materials - Material costs that can be easily traced to products
Direct labor - Labor directly involved in the production of an output.
Administrative - Costs that facilitate the daily operations of the company that are not directly involved in production
Selling - Costs incurred in promoting the product produced in the market
1. President’s salary - Administrative
2. Cost of electrical wire used in making appliances – Direct material
3. Cost of janitorial supplies (the janitors work in the factory) – Manufacturing overhead
4. Wages of assembly-line workers – Direct Labor
5. Cost of promotional displays – Selling
6. Assembly-line supervisor’s salary – Manufacturing overhead
7. Cost accountant’s salary (the accountant works in the factory) – Manufacturing Overhead
8. Cost of cleaner used to clean appliances when they are completed – Manufacturing overhead
9. Cost of aluminum used for toasters – Direct material
10. Cost of market research survey – Selling
Q:2 A The following costs are incurred by an electrical appliance manufacturer. Classify these costs as...
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