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Week 12 Preparation Questions Solutions

Week 12 Preparation Questions Solutions - Product e...

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ACCT1501 2011S1 Week 12 Preparation Questions Solutions Preparation Questions: Problem 16.1, 16.5 (part 1 & 2 only) Problem 16.1 1. Harvey’s salary is a manufacturing cost and is considered indirect labour. 2. Helen’s salary is a non-manufacturing cost and also a selling cost. 3. Harvey’s salary is a fixed cost, because his salary does not change as production varies. Helen’s salary is a mixed cost; she is paid a fixed salary plus a variable portion that varies with the sales level. Problem 16.5 Item Direct/Indirect Product Cost Product/Period Cost a. Tacks in a large sofa Indirect Product b. Salary of a plant security guard Indirect Product c. Buttons on a shirt Indirect/Direct Product d. Salary of a plant manager Indirect
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Unformatted text preview: Product e. Carpenters in a construction company Direct Product f. Salary of a warehouse clerk N/A Period g. Total overhead cost Indirect Product h. Printing and Postage for advertising circulars N/A Period i. Total selling costs N/A Period j. Wood in a new home being built Direct Product k. Depreciation on the company’s executive jet plane N/A Period l. Depletion on an existing oil well Indirect Product m. Fees paid for an annual audit N/A Period n. The total cost of operating a power service center in a factory Indirect Product o. Pipelines for transporting crude oil to a refinery Indirect Product p. The cost of a market research study N/A Period q. Pipelines for transporting crude oil to customers N/A Period...
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