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Chapter 16: Q4RQ (page 884)
Explain the differences between planning, directing, and controlling.
The planning setting up of a goal, directing is working towards the goal, and controlling is checking whether the work is done as per the planning.
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Identifying product costs and period costs Classify each cost of a paper manufacturer as either a product cost or a period cost:
b. Cost of computer software to track WIP Inventory
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.
10.Salary of the factory maintenance supervisor
Computing cost of goods manufactured
Consider the following partially completed schedules of cost of goods manufactured. Compute the missing amounts.
Banner, Inc. Larry鈥檚 Bakery Sports Gear
Beginning Work-in-Process Inventory \( (a) \) 40,800 \( 2,200
Direct Materials Used 14,400 35,900 (g)
Direct Labor 10,300 20,100 1,900
Manufacturing Overhead (b) 10,000 900
Total Manufacturing Costs Incurred during the Year 45,200 (d) (h)
Total Manufacturing Costs to Account for 55,400 (e) 8,300
Ending Work-in-Process Inventory (c) (25,500) (2,600)
Cost of Goods Manufactured \) 50,500 \( (f) \) (i)
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
Classifying costs Wheels, Inc. manufactures wheels for bicycles, tricycles, and scooters. For each cost given below, determine if the cost is a product cost or a period cost. If the cost is a product cost, further determine if the cost is direct materials (DM), direct labor (DL), or manufacturing overhead (MOH) and then determine if the product cost is a prime cost, conversion cost, or both. If the cost is a period cost, further determine if the cost is a selling expense or administrative expense (Admin). Cost (a) is answered as a guide
Cost Product Period
DM DL MOH Prime Conversion Selling Admin.
a. Metal used for rims
b. Sales salaries
c. Rent on factory
d. Wages of assembly workers
e. Salary of production supervisor
f. Depreciation on office equipment
g. Salary of CEO
h. Delivery expense
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