Practice_with_cost_classification

Practice_with_cost_classification - salvage value The...

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Practice with cost classification Variable/Fixed Period/Product (direct materials, direct labor, manufacturing overhead) (Prime cost conversion cost) Sunk cost Opportunity cost 1. Benches are made of plastic that cost $25 per bench. 2. Labor costs to assemble a bench are $15 per bench. 3. Workers making the table are supervised by a foreman making $40,000 per year. 4. Electrical costs are $6 per machine hour, and it takes .5 machine hours to make a bench. 5. Depreciation on the machines is $20,000 per year, and they have no
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Unformatted text preview: salvage value. The machines do not wear out due to use. 6. CEO’s salary is $100,000 per year. 7. Company spends $12,000 per year to advertise its products. 8. Salespersons receive a 5% commission on all benches sold. 9. Instead of making benches, the company could rent out its factory space for $45,000 per year. //home/vdimitrov/3862/caf9903c943bc48ed4e28cbe8796ef6b5ae932b3.docx...
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