87) The wages of a plant supervisor would be classified as a period cost.
88) For external reporting, GAAP requires that costs be classified as either variable or fixed.
89) Depreciation can be classified as either an inventoriable cost or a period cost, depending on what is being depreciated.
90) Depreciation on a factory can be classified as a period cost.
91) Springfield Manufacturing produces electronic storage devices, and uses the following three-part classification for its manufacturing costs: direct materials, direct manufacturing labor, and indirect manufacturing costs. Total indirect manufacturing costs for January were $300 million, and were allocated to each product on the basis of direct manufacturing labor costs of each line. Summary data (in millions) for January for the most popular electronic storage device, the Big Bertha, was:
Big Bertha
Direct manufacturing costs
$4,500,000
Direct manufacturing labor costs
$1,500,000
Indirect manufacturing costs
$4,250,000
Units produced
40,000
Required:
a.Compute the manufacturing cost per unit for each product produced in January.
b.Suppose production will be reduced to 30,000 units in February. Speculate as to whether the unit costs in February will most likely be higher or lower than unit costs in January; it is not necessary to calculate the exact February unit cost. Briefly explain your reasoning.
92) Whippany manufacturing wants to estimate costs for each product they produce at its Troy plant. The Troy plant produces three products at this plant, and runs two flexible assembly lines. Each assembly line can produce all three products.
Required:
a.Classify each of the following costs as either direct or indirect for each product.
b.Classify each of the following costs as either fixed or variable with respect to the number of units produced of each product.
DirectIndirectFixedVariable
Assembly line labor wages________________________________
Plant manager's wages________________________________
Depreciation on the assembly
line equipment________________________________
Component parts for the product________________________________
Wages of security personnel for the
factory________________________________
93) Hammer Inc., had the following activities during 2012:
Direct materials:
Beginning inventory$ 20,000
Purchases61,600
Ending inventory10,400
Direct manufacturing labor16,000
Manufacturing overhead12,000
Beginning work-in-process inventory800
Ending work-in-process inventory4,000
Beginning finished goods inventory24,000
Ending finished goods inventory16,000
Required:
a.What is the cost of direct materials used during 2012?
b.What is cost of goods manufactured for 2012?
c.What is cost of goods sold for 2012?
d.What amount of prime costs was added to production during 2012?
e.What amount of conversion costs was added to production during 2012?
94) Helmer Sporting Goods Company manufactured 100,000 units in 20X5 and reported the following costs:
Sandpaper$ 32,000Leasing costs-plant$ 384,000
Materials handling320,000Depreciation-equipment224,000
Coolants & lubricants22,400Property taxes-equipment32,000
Indirect manufacturing labor275,200Fire insurance-equipment16,000
Direct manufacturing labor2,176,000Direct material purchases3,136,000
Direct materials, 1/1/X5384,000Direct materials, 12/31/X5275,200
Finished goods, 1/1/X5672,000Sales revenue12,800,000
Finished goods, 12/31/X51,280,000Sales commissions640,000
Work-in-process, 1/1/X596,000Sales salaries576,000
Work-in-process, 12/31/X564,000Advertising costs480,000
Administration costs800,000
Required:
a.What is the amount of direct materials used during 20X5?
b.What manufacturing costs were added to WIP during 20X5?
c.What is cost of goods manufactured for 20X5?
d.What is cost of goods sold for 20X5?
