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Which of the following is a period cost?

a. Wages of an assembly worker

b. Depreciation on factory equipment

c. Sales commissions

d. Power

A cost that has been incurred in the past and is irrelevant istermed a(n):

a. variable cost.

b. opportunity cost.

c. sunk cost.

d. differential cost.

Compute factory overhead cost from the following costs:

Depreciation on factory buildings $ 45,950
Depreciation on office equipment 32,980
Direct materials used 96,840
Indirect labor 6,580

a. $96,840

b. $78,930

c. $73,000

d. $52,530

Which of the following items would be classified as a part ofprime cost?

a. Administrative cost

b. Direct labor cost

c. Factory overhead cost

d. Selling cost

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Lelia Lubowitz
Lelia LubowitzLv2
28 Sep 2019

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Related questions

(a) Depreciation on factory equipment.

(b) Depreciation on office equipment.

(c) Depreciation on factory building.

(d) Advertising manager's salary.

(e) Assembly foreman's salary.

(f) Salespersons' salaries.

(g) Salespersons' travel expenses.

(h) Supplies for the Machining Department.

(i) Advertising supplies used.

(j) Electricity for the Assembly Department.

(k) Lost materials (scrap) in a Machining Department.

(l) Direct labor in the Assembly Department.

(m) Supplies for the sales office.

(n) Sales commissions.

(o) Packing supplies.

(p) Cost of hiring new employees.

(q) Payroll fringe benefits for workers in the ShippingDepartment.

(r) Supplies for Production Scheduling.

(s) Cost of repairing parts improperly manufactured in theMachining Department.

(t) Paint for the Assembly Department.

(u) Heat, light, and power for the factory.

(v) Leasing of computer equipment for the AccountingDepartment.


Specify an appropriate cost driver for tracing costs associatedwith the various levels of activities to the next cost objective orproducts, whichever is appropriate

Ohno Company specializes in manufacturing a unique model of bicycle helmet. The model is well accepted by consumers, and the company has enough orders to keep the factory production at 10,000 helmets per month (80% of its full capacity). Ohno's monthly manufacturing cost and other expense data are as follows. Rent on factory equipment $11,000 Insurance on factory building 1,500 Raw materials (plastics, polystyrene, etc.) 75,000 Utility costs for factory 900 Supplies for general office 300 Wages for assembly line workers 58,000 Depreciation on office equipment 800 Miscellaneous materials (glue, thread, etc.) 1,100 Factory manager's salary 5,700 Property taxes on factory building 400 Advertising for helmets 14,000 Sales commissions 10,000 Depreciation on factory building 1,500 Margin check figures provide key numbers to confirm that you are on the right track. Instructions (a) Prepare an answer sheet with the following column headings. Product Costs Cost Item Direct Materials Direct Labor Manufacturing Overhead Period Costs Enter each cost item on your answer sheet, placing the dollar amount under the appropriate headings. Total the dollar amounts in each of the columns. DM $75,000 DL $58,000 MO $22,100 PC $25,100 (b) Compute the cost to produce one helmet. P1-2A Classify manufacturing costs into different categories and compute the unit cost. (LO 2), AP Bell Company, a manufacturer of audio systems, started its production in October 2017. For the preceding 3 years, Bell had been a retailer of audio systems. After a thorough survey of audio system markets, Bell decided to turn its retail store into an audio equipment factory. Raw materials cost for an audio system will total $74 per unit. Workers on the production lines are on average paid $12 per hour. An audio system usually takes 5 hours to complete. In addition, the rent on the equipment used to assemble audio systems amounts to $4,900 per month. Indirect materials cost $5 per system. A supervisor was hired to oversee production; her monthly salary is $3,000. Factory janitorial costs are $1,300 monthly. Advertising costs for the audio system will be $9,500 per month. The factory building depreciation expense is $7,800 per year. Property taxes on the factory building will be $9,000 per year. Instructions (a) Prepare an answer sheet with the following column headings. Product Costs Cost Item Direct Materials Direct Labor Manufacturing Overhead Period Costs Assuming that Bell manufactures, on average, 1,500 audio systems per month, enter each cost item on your answer sheet, placing the dollar amount per month under the appropriate headings. Total the dollar amounts in each of the columns. DM $111,00 DL $ 90,000 MO $ 18,100 PC $ 9,500 (b) Compute the cost to produce one audio system.

Durham Company uses a job-ordercosting system. The following transactions took place lastyear:

a. Raw materials requisitioned foruse in production, $52,000 (80% direct and 20% indirect).
b. Factory utility costs incurred,$15,800.
c.

Depreciation recorded on plant and equipment, $30,400.Three-fourths of the depreciation relates to factory equipment, andthe remainder relates to selling and administrative equipment.
d. Costs for salaries and wageswere incurred as follows:
Direct labor $ 52,000
Indirect labor $ 19,200
Salescommissions $ 11,200
Administrativesalaries $ 37,000
e.

Insurance costs incurred, $5,400 (80% relates to factoryoperations, and 20% relates to selling and administrativeactivities).
f. Miscellaneous selling andadministrative expenses incurred, $19,200.
g.

Manufacturing overhead was applied to production. The companyapplies overhead on the basis of 130% of direct labor cost.
h.

Goods that cost $142,000 to manufacture according to their jobcost sheets were transferred to the finished goods warehouse.
i. Goods that had cost $132,000 tomanufacture according to their job cost sheets were sold for$224,000.
Required:
1. Determine the underapplied oroverapplied overhead for the year.



2. Prepare an income statementfor the year. (Hint: No calculations are required to determine thecost of goods sold before any adjustment for underapplied oroverapplied overhead.)

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