Question

Presented below is a list of costs and expenses usually incurred by Barnum Corporation, a manufacturer of furniture, in its factory. Classify the below items into the following categories: (a) direct materials, (b) direct labor, and (c) manufacturing overhead.

Answer 1

Answer:

Explanation:

The direct material cost is the cost that is incurred for the raw material goods while the direct labor cost is the cost which is incurred for the labors like wages, salary. These two cost are directly related to the production of the product

And, the manufacturing overhead is an indirect cost that is indirectly related. Example: Depreciation on factory equipment, repairs of factory, etc

So, the categorization is shown below:

1. salaries for assembly line inspectors  = Manufacturing overhead cost or direct labor cost

2. insurance on factory machine  = Manufacturing overhead cost

3. property taxes on the factory building  = Manufacturing overhead cost

4. factory repairs  = Manufacturing overhead cost

5. upholstery used in manufacturing furniture  = Direct material cost

6. wages paid to assembly line workers  = Direct labor cost

7. factory machinery depreciation  = Manufacturing overhead cost

8. glue,nails,paint, and other small parts used in production  = Manufacturing overhead cost

9. factory supervisors salaries  = Manufacturing overhead cost

10. wood used in manufacturing furniture = Direct material cost