Question

Indicate whether each of the following costs of an automobile manufacturer would be classified as direct materials cost, direct labor cost, or factory overhead cost: Cost Classification a. Automobile engine b. Brake pads c. Depreciation of robotic assembly line equipment d. Glass for front and rear windshields e. Safety helmets and masks for assembly line workers f. Salary of quality control inspector g. Steering wheel h. Tires i. Wages of assembly line workers

Answer 1

Answer:

The given costs and classification are;

Cost                    ${}$                                                                     Classification

a. Automobile engine ${}$                                                       Direct Material cost

b. Brake pads ${}$                                                                    Direct Material cost

c. Depreciation of robotic assembly line equipment           Factory overhead cost

d. Glass for front and rear windshields ${}$                            Direct Material cost

e. Safety helmets and masks for assembly line workers     Factory overhead cost

f. Salary of quality control inspector ${}$                                     Factory overhead cost

g. Steering wheel ${}$                                                                Direct Material cost

h. Tires ${}$                                                                                 Direct Material cost

i. Wages of assembly line workers ${}$                                       Direct labor cost

Explanation:

Direct material cost is the total cost of the materials with which the product is manufactured

Direct labor costs are the total cost of the wages and salaries which the workers directly involved in the production of the goods or the rendering of the service receive

Factory overhead is the operational cost of the production facility that are not directly related to the output or produced materials. Factor overhead are all the other costs excluding the direct labor and material costs.