Your friend Suzie Whitson has designed a new type of outdoor

Your friend, Suzie Whitson, has designed a new type of outdoor toy that helps children learn basic concepts such as colors, numbers, and shapes. Suzie\'s product will target two groups: day care centers in warm climates and home school programs. Her company is Jiffy Jet and costs for last month follow S 3,200 1,000 30,000 2,000 500 900 3,500 150 6,000 4,200 250 1,200 1,000 2,000 7,500 Factory rent Wages paid to assembly workers Depreciation for salespersons\' vehicles Screws Utilities for factory Assembly supervisor\'s salary Sandpaper President\'s salary Plastic tubing Paint Sales commissions Factory insurance Depreciation on cutting machines Wages paid to painters Required 1. Identify each of the preceding costs as either a product or a period cost. If the cost is a product cost, decide whether it is for direct materials (DM), direct labor (DL), or manufacturing overhead (MOH). (Select Factory rent Wages paid to assembly workers Depreciation for salespersons\' vehicles Screws Utilities for factory Assembly supervisor\'s salary Sandpaper President\'s salary Plastic tubing Paint Sales commissions Factory insurance Depreciation on cutting machines Wages paid to painters

Solution

factory rent Period cost NA Company Advertising Period cost NA Wages paid to assembly worker Product cost DL Depreciation for sales person vehicles Period cost NA Screws Product cost MOH Utilities for factory Product cost MOH Assembly supervisor salary Product cost MOH Sand paper Product cost MOH President\'s Salary Period cost NA Plastic tubing Product cost DM Paints Product cost DM Sales commission Period cost NA Factory insurance Product cost MOH Depreciation on cutting machines Product cost MOH Wages paid to painters Product cost DL 2 a Direct material Plastic tubing 4200 Paints 250 Total 4450 b Direct labor Wages paid to assembly worker 30000 Wages paid to painters 7500 Total 37500 c Manufacturing overheads Screws 500 Utilities for factory 900 Assembly supervisor salary 3500 Sand paper 150 Factory insurance 1000 Depreciation on cutting machines 2000 Total manufacturing overheads 8050 d Prime cost = Direct material + direct Labor Direct material 4450 Direct labor 37500 Total prime cost 41950 e Conversion cost Direct labor 37500 Manufacturing overheads 8050 Total conversion cost 45550 f Product cost Direct material 4450 Direct labor 37500 Manufacturing overheads 8050 Total product cost 50000