Project #48466 - accounting

Classifying Costs

The following is a list of costs that were incurred in the production and sale of boats:

Classify each cost as either a product cost or a period cost. Indicate whether each product cost is a direct materials cost, a direct labor cost, or a factory overhead cost. Indicate whether each period cost is a selling expense or an administrative expense.

Costs Classification
a.  Memberships for key executives in the Bass World Association.  
b.  Cost of electrical wiring for boats.  
c.  Wood paneling for use in interior boat trim.  
d.  Annual bonus paid to top executives of the company.  
e.  Legal department costs for the year.  
f.  Salary of shop supervisor.  
g.  Salary of president of company.  
h.  Fiberglass for producing the boat hull.  
i.  Cost of normal scrap from defective hulls.  
j.  Oil to lubricate factory equipment.  
k.  Special advertising campaign in Bass World.  
l.  Masks for use by sanders in smoothing boat hulls.  
m.  Hourly wages of assembly line workers.  
n.  Decals for boat hull, the cost of which is immaterial to the cost of the final product.  
o.  Salary of chief financial officer.  
p.  Power used by sanding equipment.  
q.  Straight-line depreciation on factory equipment.  
r.  Cost of boat for "grand prize" promotion in local bass tournament.  
s.  Canvas top for boats.  
t.  Commissions to sales representatives, based upon the number of boats sold.  
u.  Yearly cost of the maintenance contract for robotic equipment.  
v.  Steering wheels.  
w.  Cost of metal hardware for boats, such as ornaments and tie-down grasps.  
x.  Boat chairs.  
y.  Annual fee to pro-fisherman Bill Tennessee to promote the boats.  
z.  Cost of paving the headquarters employee parking lot.  

 

Classifying Costs

The following is a list of costs incurred by several businesses.

Classify each of the following costs as product costs or period costs. Indicate whether each product cost is a direct materials cost, a direct labor cost, or a factory overhead cost. Indicate whether each period cost is a selling expense or an administrative expense:

Costs Classification
a.  Rent for a warehouse used to store work in process and finished products.  
b.  Depreciation of copying machines used by the Marketing Department.  
c.  Maintenance costs for factory equipment.  
d.  Fees charged by collection agency on past-due customer accounts.  
e.  Surgeon's fee for heart bypass surgery.  
f.  Cost of 30-second television commercial.  
g.  Telephone charges by president's office.  
h.  Travel costs of marketing executives to annual sales meeting.  
i.  Cost of plastic for a telephone being manufactured.  
j.  Pens, paper, and other supplies used by the Accounting Department in preparing various managerial reports.  
k.  Charitable contribution to United Fund.  
l.  Depreciation of tools used in production.  
m.  Cost of fabric used by clothing manufacturer.  
n.  Depreciation of robot used to assemble a product.  
o.  Wages of a machine operator on the production line.  
p.  Salary of the vice president of manufacturing operations.  
q.  Factory janitorial supplies.  
r.  Maintenance and repair costs for factory equipment.  
s.  Electricity used to operate factory machinery.  
t.  Oil lubricants for factory plant and equipment.  
u.  Cost of sewing machine needles used by a shirt manufacturer.  
v.  Fees paid to lawn service for office grounds upkeep.  
w.  Depreciation of microcomputers used in the factory to coordinate and monitor the production schedules.  
x.  Wages of production quality control personnel.  

 
 
 
 
 
 

1.  Determine the amounts of the missing items, identifying them by letter. Enter all amounts as positive numbers.

Letter Grant Company McClellan Company
a. $ $
b. $ $
c. $ $
d. $ $
e. $ $
f. $ $


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2.  Prepare McClellan Company's statement of cost of goods manufactured for December. Enter all amounts as positive numbers.



McClellan Company
Statement of Cost of Goods Manufactured
For the Month Ended December 31, 2014
         
$
Direct materials:
           
 
$
       
 
       
 
$
       
 
       
     
$
   
     
   
     
   
Total manufacturing costs incurred during December
         
Total manufacturing costs
         
$
         
         
$

 



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3.  Prepare McClellan Company's income statement for December.



McClellan Company
Income Statement
For the Month Ended December 31, 2014
     
$
Cost of goods sold:
       
 
$
   
 
   
 
$
   
 
   
     
     
$
     
     
$

 

 
 
 

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1.  Prepare the 2014 statement of cost of goods manufactured.



Deutsch Corporation
Statement of Cost of Goods Manufactured
For the Year Ended December 31, 2014
         
$
Direct materials:
           
 
$
       
 
       
 
$
       
 
       
     
$
   
     
   
Factory overhead:
           
 
$
       
 
       
 
       
 
       
 
       
 
       
 
       
Total factory overhead
     
   
Total manufacturing costs incurred during the year
         
Total manufacturing costs
         
$
         
Cost of goods manufactured
         
$

 



  Hide    

2.  Prepare the 2014 income statement.



Deutsch Corporation
Income Statement
For the Year Ended December 31, 2014
         
$
Cost of good sold:
           
     
$
   
     
   
     
$
   
     
   
         
         
$
Operating expenses:
           
Administrative expenses:
           
 
$
       
 
       
 
 
$
   
Selling expenses:
           
 
$
       
 
 
   
Total operating expenses
         
         
$

 

Subject Business
Due By (Pacific Time) 11/21/2014 11:59 pm
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