This list contains costs that various organizations incur; they fall into three categories: direct materials (DM), direct labor (DL), or overhead (OH).Classify each of these items as direct materials, direct labor, or overhead, and provide the rationale for your classification decision.Glue used to attach labels to bottles containing a patented medicine.Compressed air used in operating paint sprayers for Student Painters, a company that paints houses and apartments.Insurance on a factory building and equipment.A production department supervisor’s salary.Rent on factory machinery.Iron ore in a steel mill.Oil, gasoline, and grease for forklift trucks in a manufacturing company’s warehouse.Services of painters in building construction.Cutting oils used in machining operations.Cost of paper towels in a factory employees’ washroom.Payroll taxes and fringe benefits related to direct labor.The plant electricians’ salaries.Crude oil to an oil refinery.Copy editor’s salary in a book publishing company.

The direct material is associated with on the raw material letter using the production process…

Answered: apartments. Insurance on a factory…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 2TP: This list contains costs that various organizations incur; they fall into three categories: direct...

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This list contains costs that various organizations incur; they fall into three categories: direct materials (DM), direct labor (DL), or overhead (OH).

Classify each of these items as direct materials, direct labor, or overhead, and provide the rationale for your classification decision.

Glue used to attach labels to bottles containing a patented medicine.
Compressed air used in operating paint sprayers for Student Painters, a company that paints houses and apartments.
Insurance on a factory building and equipment.
A production department supervisor’s salary.
Rent on factory machinery.
Iron ore in a steel mill.
Oil, gasoline, and grease for forklift trucks in a manufacturing company’s warehouse.
Services of painters in building construction.
Cutting oils used in machining operations.
Cost of paper towels in a factory employees’ washroom.
Payroll taxes and fringe benefits related to direct labor.
The plant electricians’ salaries.
Crude oil to an oil refinery.
Copy editor’s salary in a book publishing company.

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apartments. Insurance on a factory building and equipment. A production department supervisor’s salary. Rent on factory machinery. Iron ore in a steel mill. Oil, gasoline, and grease for forklift trucks in a manufacturing company’s warehouse. Services of painters in building construction.