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Unformatted text preview: 2 Problem II Management of Caterpillar, Inc. wants to know the product cost of a dump truck for external financial reporting purposes. Determine whether the following costs would be considered product (PROD) or period (PER) costs. Also determine if they would be considered direct materials (DM), direct labor (DL), overhead (OH), selling (S), or general and administrative (GA) costs. Finally, determine whether the cost would be assigned using direct tracing (DIT), driver tracing (DRT), allocation (ALL), or if they would not be assigned (NA). Cost PROD/PER DM/DL/OH/S/GA DIT/DRT/ALL/NA Cost of the tires on the dump truck Production supervisor’s salary Cost of the factory maintenance department Wages of workers who put the tires on the dump truck Cost of shipping the finished dump truck to the customer Cost of lug nuts to hold tires in place Cost of legal department salaries Cost of property tax for the production facility 3...
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- Fall '09
- Accounting, Salary, Supply chain management terms, dump truck Production supervisor