Manufacturing Overhead Item Cost Variable or Fixed Cost Direct Materials Hotdog per unit $1.00 Hotdog roll per unit $.50 Hotdog tray per unit Condiments per unit $.05 $.20 $110 Propane gas (for the year) Tongs $15 Rent paid to LaSalle $1,000

Manufacturing Overhead Item Cost Variable or Fixed Cost Direct Materials Hotdog per unit $1.00 Hotdog roll per unit $.50 Hotdog tray per unit Condiments per unit $.05 $.20 $110 Propane gas (for the year) Tongs $15 Rent paid to LaSalle $1,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Question

from the above list of 7 types of costs indicate which costs are direct materials and which are mfg overhead

Manufacturing
Overhead
Item
Cost
Variable or Fixed Cost Direct Materials
Hotdog per unit
$1.00
Hotdog roll per unit
$.50
$.05
Hotdog tray per unit
Condiments per unit
$.20
Propane gas (for the year)
Tongs
$110
$15
Rent paid to LaSalle
$1,000

Definition Definition Indirect costs incurred while producing goods or services. Overhead costs cannot be directly attributed to products or services. Overhead includes indirect material cost, indirect labor cost, rent, utilities expenses, and depreciation. Since these costs directly affect the profitability of a company, managing overhead becomes an important task for management.

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