Answer:
Factory rent $ 3,030: Product - MOH - Fixed
Company advertising 1,060: Period - Variable
Wages paid to assembly workers 31,400: Product - DL - Variable
Depreciation for salespersons’ vehicles 2,140: Period - Fixed
Screws 595: Product - DM - Variable
Utilities for factory 825: Product - MOH - Variable
Assembly supervisor’s salary 3,640: Product - MOH - Fixed
Sandpaper 125: Product - MOH - Variable
President’s salary 5,050: Period - Fixed
Plastic tubing 4,080: Product - MOH - variable
Paint 240: Product - DM - Variable
Sales commissions 1,330: Period - Variable
Factory insurance 1,010: Product - MOH - fixed
Depreciation on cutting machines 2,120: Product - MOH - Fixed
Wages paid to painters 8,000: Product - DL - Variable
Explanation:
- Direct materials are those materials and supplies that are consumed during the manufacture of a product, and which are directly identified with that product.
- Direct labor is production or services labor that is assigned to a specific product, cost center, or work order.
- Manufacturing overhead refers to indirect factory-related costs that are incurred when a product is manufactured.
- Period costs are not directly tied to the production process. Overhead or sales, general, and administrative (SG&A) costs are considered period costs. SG&A includes costs of the corporate office, selling, marketing, and the overall administration of company business.
- Product costs are the direct costs involved in producing a product. A manufacturer, for example, would have production costs that include: Direct labor, Raw materials, Manufacturing supplies, Overhead that's directly tied to the production facility such as electricity.
- Variable cost is a corporate expense that changes in proportion to production output.
- Fixed cost is a cost that does not change with an increase or decrease in the amount of goods or services produced or sold.
In this exercise:
Factory rent $ 3,030: Product - MOH - Fixed
Company advertising 1,060: Period - Variable
Wages paid to assembly workers 31,400: Product - DL - Variable
Depreciation for salespersons’ vehicles 2,140: Period - Fixed
Screws 595: Product - DM - Variable
Utilities for factory 825: Product - MOH - Variable
Assembly supervisor’s salary 3,640: Product - MOH - Fixed
Sandpaper 125: Product - MOH - Variable
President’s salary 5,050: Period - Fixed
Plastic tubing 4,080: Product - MOH - variable
Paint 240: Product - DM - Variable
Sales commissions 1,330: Period - Variable
Factory insurance 1,010: Product - MOH - fixed
Depreciation on cutting machines 2,120: Product - MOH - Fixed
Wages paid to painters 8,000: Product - DL - Variable
