Assume that Maria Cottonwood ( PBI-2) has decided to begin production of her fire extinguisher. Her...

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Assume that Maria Cottonwood ( PBI-2) has decided to begin production of her fire extinguisher. Her company is Blaze Be Gone, whose costs for last month follow. Factory rent $ 2.000 Company advertising 500 Wages paid to assembly workers 25,000 Depreciation for salespersons' vehicles 1,000 Screws 250 Utilities for factory 800 Production supervisor's salary 4,000 Sandpaper 150 President's salary 6,000 Sheet metal 7.500 Paint 750 Sales commissions 1,700 Factory insurance 2,000 Depreciation on factory machinery 5.000 Wages paid to painters 5,500 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). 2. Identify each of the preceding costs as variable or fixed cost. 3. Determine the total amount for each of the following: a. Direct materials. b. Direct labor. c. Manufacturing overhead. d. Prime cost. e. Conversion cost. f. Total product cost. g. Total period cost. h. Total variable cost. i. Total fixed cost. 4. Explain why the depreciation on the salespersons' vehicles is treated differently than the depreciation on the factory machines. How might this difference impact Maria's financial statements in terms of the balance sheet and income statement? Assume that Maria Cottonwood ( PBI-2) has decided to begin production of her fire extinguisher. Her company is Blaze Be Gone, whose costs for last month follow. Factory rent $ 2.000 Company advertising 500 Wages paid to assembly workers 25,000 Depreciation for salespersons' vehicles 1,000 Screws 250 Utilities for factory 800 Production supervisor's salary 4,000 Sandpaper 150 President's salary 6,000 Sheet metal 7.500 Paint 750 Sales commissions 1,700 Factory insurance 2,000 Depreciation on factory machinery 5.000 Wages paid to painters 5,500 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). 2. Identify each of the preceding costs as variable or fixed cost. 3. Determine the total amount for each of the following: a. Direct materials. b. Direct labor. c. Manufacturing overhead. d. Prime cost. e. Conversion cost. f. Total product cost. g. Total period cost. h. Total variable cost. i. Total fixed cost. 4. Explain why the depreciation on the salespersons' vehicles is treated differently than the depreciation on the factory machines. How might this difference impact Maria's financial statements in terms of the balance sheet and income statement?

Answer rating: 100% (QA)

Answer 1 and 2 Product costs are costs involved in the manufacturing of the prodct Are incurred only if production happens Period Costs are incurred irrespective of the production process Direct Labor ... View the full answer