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Exercise 2-2
1. The cost of a hard-drive installed in a computer: direct materials cost.
2. The cost of advertising in the Puget Sound Computer User newspaper: Selling and Administrative cost.
3. The wages of employees who assemble computers from components: direct labor cost.
4. Sales commissions paid to the company’s salespeople: Selling and Administrative cost.
5. The wages of the assembly shop’s supervisor: manufacturing overhead cost.
6. The wages of the company’s accountant: administrative cost.
7. Depreciation on equipment used to test assembled computers before release to customers: manufacturing overhead cost.
8. Rent on the facility in the industrial park: Manufacturing overhead
Exercise 2-3 Product Cost Period Cost
1. Depreciation on salespersons’ cars X
2. Rent on equipment used in the factory X
3. Lubricants used for maintenance of machines X
4. Salaries of finished goods warehouse personnel X
5. Soap and paper towels used by factory workers at the end of a shift X
6. Factory supervisors’ salaries X
7. Heat, water, and power consumed in the factory X
8. Materials used for boxing products for shipment overseas (units are not normally boxed) X
9. Advertising costs X
10. Workers’ compensation insurance on factory employees X
11. Depreciation on chairs and tables in the factory lunchroom X
12. The wages of the receptionist in the administrative offices X
13. Lease cost of the corporate jet used by the company 's executives X
14. Rent on rooms at a Florida resort for holding the annual sales conference X
15. Attractively designed box for packaging the company’s product—breakfast cereal X
Exercise 2-5
Lompac Products
Schedule of Cost of Goods Manufactured Direct materials:
Beginning raw materials inventory $ 60,000
Add: Purchases of raw materials 690,000
Raw materials available for use 750,000
Deduct: Ending raw materials inventory 45,000
Raw materials used in
1. The cost of a hard-drive installed in a computer: direct materials cost.
2. The cost of advertising in the Puget Sound Computer User newspaper: Selling and Administrative cost.
3. The wages of employees who assemble computers from components: direct labor cost.
4. Sales commissions paid to the company’s salespeople: Selling and Administrative cost.
5. The wages of the assembly shop’s supervisor: manufacturing overhead cost.
6. The wages of the company’s accountant: administrative cost.
7. Depreciation on equipment used to test assembled computers before release to customers: manufacturing overhead cost.
8. Rent on the facility in the industrial park: Manufacturing overhead
Exercise 2-3 Product Cost Period Cost
1. Depreciation on salespersons’ cars X
2. Rent on equipment used in the factory X
3. Lubricants used for maintenance of machines X
4. Salaries of finished goods warehouse personnel X
5. Soap and paper towels used by factory workers at the end of a shift X
6. Factory supervisors’ salaries X
7. Heat, water, and power consumed in the factory X
8. Materials used for boxing products for shipment overseas (units are not normally boxed) X
9. Advertising costs X
10. Workers’ compensation insurance on factory employees X
11. Depreciation on chairs and tables in the factory lunchroom X
12. The wages of the receptionist in the administrative offices X
13. Lease cost of the corporate jet used by the company 's executives X
14. Rent on rooms at a Florida resort for holding the annual sales conference X
15. Attractively designed box for packaging the company’s product—breakfast cereal X
Exercise 2-5
Lompac Products
Schedule of Cost of Goods Manufactured Direct materials:
Beginning raw materials inventory $ 60,000
Add: Purchases of raw materials 690,000
Raw materials available for use 750,000
Deduct: Ending raw materials inventory 45,000
Raw materials used in