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Chapter 16: Q2TI_1 (page 869)

Identify each cost as a period cost or a product cost. If it is a product cost, further indicate if the cost is direct materials, direct labor, or manufacturing overhead. Then determine if the product cost is a prime cost and/or a conversion cost.

6. Wages of assembly line workers for a factory

Short Answer

Expert verified

It is product cost, direct labor, prime cost as well as conversion cost.

Step by step solution

01

Definition of wages

The wages are defined as the remuneration paid by the business to their employees and workers for the work performed by them.

02

Step 2:Identification of costs

The wages of assembly line workers are considered as the product cost, the product cost is the cost of making a product or purchasing a product.

It is the direct labor as it is the cost incurred on labor that is directly associated with the production of goods.

It is a prime cost as well as the conversion cost.

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Most popular questions from this chapter

Preparing a schedule of cost of goods manufactured Wilson Corp., a lamp manufacturer, provided the following information for the year ended December 31, 2018:

Balances: Beginning Ending

Direct Materials \( 59,000 \) 23,000

Work-in-Process Inventory 109,000 62,000

Finished Goods Inventory 41,000 44,000

Other information:

Depreciation, plant building and equipment $ 16,000

Direct materials purchases 151,000

Insurance on plant 24,000

Sales salaries 47,000

Repairs and maintenance鈥攑lant 10,000

Indirect labor 39,000

Direct labor 121,000

Administrative expenses 60,000

Requirements 2. What is the unit product cost if Wilson manufactured 3,700 lamps for the year?

Identify each cost as a period cost or a product cost. If it is a product cost, further indicate if the cost is direct materials, direct labor, or manufacturing overhead. Then determine if the product cost is a prime cost and/or a conversion cost.

7. Wages of the office receptionist in an administrative office

Identify each cost as a period cost or a product cost. If it is a product cost, further indicate if the cost is direct materials, direct labor, or manufacturing overhead. Then determine if the product cost is a prime cost and/or a conversion cost.

8. Property taxes on the factory

Computing direct materials used

Tuscany, Inc. has compiled the following data:

Purchases of Direct Materials $ 6,300

Freight In 400

Property Taxes 800

Ending Direct Materials 1,300

Beginning Direct Materials 4,100

Compute the amount of direct materials used.

List the three inventory accounts used by manufacturing companies, and describe each.
See all solutions

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