Solutions chap 2 - Exercise21(15minutes) 1.

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Exercise 2-1  (15 minutes) 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: marketing and selling cost. 3. The wages of employees who assemble computers from  components: direct labor cost. 4. Sales commissions paid to the company’s salespeople: marketing  and selling 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: a combination of  manufacturing overhead, administrative, and marketing and selling  cost. The rent would most likely be prorated on the basis of the  amount of space occupied by manufacturing, administrative, and  marketing operations. Exercise 2-2  (15 minutes) 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
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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.
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Solutions chap 2 - Exercise21(15minutes) 1.

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