DeVry University ACCT346 Week 1 Assignment-1 Identify whether each of the items below is a Product Cost or Period Cost:

DeVry University

ACCT346 Weekly Assignment

Week 1

Directions: Your assignment this week is to answer the four questions below. Please note that Question 4 contains multiple parts. Please show your work for full credit on Questions 4b - 4e.

1. Identify whether each of the items below is a Product Cost or Period Cost: (1/2 point each, total 5 points)

Factory insurance

Product

Interest on bank loan

Eggs, salt, water used for baking

Depreciation on bake ovens

Paper wrappers for bread

Delivery truck costs

Advertising costs

Factory supervisor salaries

Sales Commissions

Flour used in baking bread

2. Identify whether each of the items below is a Direct Cost or Indirect Cost: (1/2 point each, total 5 points)

Factory insurance

Indirect

Baker's wages

Eggs used for baking

Depreciation on bake ovens

Paper wrappers for bread

Cleaning materials for bake ovens

Utilities used in factory

Factory supervisor salaries

Small amount of salt used

Flour used in baking bread

3. Identify whether each of the below is a Fixed Cost or Variable Cost: (1/2 point each, total 5 points)

Shipping costs for bread

Variable

Cost of fuel for delivery truck

Factory rent

Factory insurance

Maintenance on delivery truck

Sales commissions

Hourly wages paid to baker's assistant

Oven depreciation

Cost of fruit for cake topping

Factory utilities

4. Classify each as direct material, direct labor, indirect labor, indirect labor, other manufacturing overhead or period cost, and then answer the 5 questions below:

4a. Classify each cost (the first one is done for you): (5 points total)

An airline manufacturer incurred the following costs last month (in thousands of dollars):

Direct Material

Direct Labor

Indirect Material

Indirect Labor

Other Manufacturing Overhead

Period Cost

a. Depreciation on forklifts ...........................................................................

$60

$60

b. Property tax on corporate marketing office .............................................

$30

c. Cost of warranty repairs ............................................................................

$220

d. Factory janitors’ wages .............................................................................

$10

e. Cost of designing new plant layout ..........................................................

$190

f. Machine operators’ health insurance .......................................................

$40

g. Airplane seats ...........................................................................................

$270

h. Depreciation on administrative offices .....................................................

$70

i. Assembly workers’ wages .........................................................................

$670

j. Plant utilities .............................................................................................

$110

k. Production supervisors’ salaries ................................................................

$160

l. Jet engines ................................................................................................

$1,100

m. Machine lubricants ....................................................................................

$20

Then, answer the below questions:

4b. How much are total manufacturing overhead costs? (5 points)

4c. How much are total inventoriable product costs? (5 points)

4d. How much are total prime costs? (5 points)

4e. How much are total conversion costs? (5 points)