FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Circle the following costs that would be included in the cost of a manufactured product
according to the variable costing concept:
a. rent on factory building
b. direct materials
c. property taxes on factory building
d. electricity purchased to operate factory equipment
e. salary of factory supervisor
f.
g. direct labor
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- Identify the following as fixed costs (F), variable costs (V), or mixed costs(M). insurance on factory building advertising expensearrow_forward! Required information [The following information applies to the questions displayed below.] For many years, Thomson Company manufactured a single product called LEC 40. Then three years ago, the company automated a portion of its plant and at the same time introduced a second product called LEC 90 that has become increasingly popular. The LEC 90 is a more complex product, requiring 0.60 hours of direct labor time per unit to manufacture and extensive machining in the automated portion of the plant. The LEC 40 requires only 0.20 hours of direct labor time per unit and only a small amount of machining. Manufacturing overhead costs are currently assigned to products on the basis of direct labor-hours. Despite the growing popularity of the company's new LEC 90, profits have been declining steadily. Management is beginning to believe that there may be a problem with the company's costing system. Direct material and direct labor costs per unit are as follows: Direct materials Direct labor…arrow_forwardClassify each of the following costs as Product (direct/indirect) or Period and Variable, Fixed or Mixed. Costs Raw materials Staples used to secure packed boxes of product Plant janitors' wages Order processing clerks' wages Advertising expenses Production workers' wages Production supervisors' salaries Sales force commissions Maintenance supplies used President's salary Electricity cost for office building Real estate taxes for Factory Real estate taxes for Office building Product-direct Product-indirect Period Period Variable Fixed Variable Fixedarrow_forward
- What types of costs are customarily included in the cost of manufactured products under (a) the absorption costing concept and (b) the variable costing concept? Which of the following costs would be included in the cost of a manufactured product according to the variable costing concept: (a) rent on factory building, (b) direct materials, (c) property taxes on factory building, (d) electricity purchased to operate factory equipment, (e) salary of factory supervisor, (f) depreciation on factory building, (g) direct labor? Marley Company has the following information for March: Sales $912,000 Variable cost of goods sold 474,000 Fixed manufacturing costs 82,000 Variable selling and administrative expenses 238,100 Fixed selling and administrative expenses 54,700 Determine (a) the manufacturing margin, (b) the contribution margin, and (c) operating income for Marley Company for the month of March.arrow_forward1. With ABC, overhead costs are assigned to each product based on ________. Group of answer choices machine hours per product price of the product a predetermined overhead rate for a single cost driver the proportion of that product’s use of the cost driverarrow_forwardIndicate whether each cost is: A. Fixed or Variable b. Selling, General/Administrative, or Manufacturingarrow_forward
- Concepts and Terminology From the choices presented in parentheses, choose the appropriate term for completing each of the following sentences: Sentence a. An example of factory overhead is b. Direct materials costs combined with direct labor costs are called c. Long-term plans are called d. Advertising costs are usually viewed as plans. costs. costs. e. The management process by which management monitors operations by comparing actual and expected results is f. The plant manager's salary would be considered to the product. g. The salaries of factory supervisors are normally considered a cost.arrow_forwardAll of the following are variable costs except for which of the following? Group of answer choices Production supervisor’s salary Sales commission based on number of sales units Direct material costs Direct labor costsarrow_forwardUse the information to prepare a schedule of cost of goods manufactured and an income statement. Assume no indirect materials are used and all amounts are shown in millions.arrow_forward
- Under variable costing, which of the following costs would not be included in finished goods inventory? a. electricity used by factory machinery b. steel costs for a machine tool manufacturer c. salary of factory supervisor d. wages of machine operatorarrow_forwardThe Dorilane Company produces a set of wood patio furniture consisting of a table and four chairs. The company has enough customer demand to justify producing its full capacity of 3,800 sets per year. Annual cost data at full capacity follow: Direct labor Advertising Factory supervision Property taxes, factory building Sales commissions Insurance, factory Depreciation, administrative office equipment Lease cost, factory equipment Indirect materials, factory Depreciation, factory building Administrative office supplies (billing) Administrative office salaries Direct materials used (wood, bolts, etc.) Utilities, factory $ 89,000 $ 103,000 $70,000 $ 23,000 $ 65,000 $ 6,000 $ 2,000 $ 17,000 $ 18,000 $ 106,000 $ 5,000 $ 111,000 $ 426,000 $ 46,000 Required: 1. Enter the dollar amount of each cost item under the appropriate headings. Note that each cost item is classified in two ways: first, as variable or fixed with respect to the number of units produced and sold; and second, as a selling…arrow_forwardFactory or Manufacturing Overhead costs would include all of the following except: A) Indirect materials B) Direct materials C) Depreciation expense D) Insurance expensearrow_forward
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