Question

Question 3: Cost terminology in manufacturing firms a) Direct materials include O only major materials and components O only raw materials such as steel and glass O all materials and components Direct labor includes O only managers who directly supervise the production process all production labor including supervisors and maintenance staff O only hourly production workers (aka assembly workers) Manufacturing overhead includes O both big items that cannot be traced (e.g., factory rent) and small items that are not worth tracing (e.g., glue, grease) only small items that are not worth tracing (e.g., glue, grease) only big items that cannot be traced (e.g., factory rent) O only non-manufacturing costs b) Classify the following items as direct materials (DM), direct labor (DL), or manufacturing overhead (OH) for a car assembly plant: Rent for the factory building Cost of engines used in production Depreciation on production equipment DL DM O OH Cost of lubricant used in production DL DM OH Production supervisor's salary Assembly workers wages ODL ODM ООН ODL ODM ООН

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MANAGERIAL ACCOUNTING QUESTIONS

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Answer 1

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