Problem $2(12$ points$)$

REQUIRED: Following is a list of product costs from Oakland Company, a furniture manufacturer. Classify the costs listed below. They will be EITHER product OR period. For product costs, note whether it's DM$,$ DL or MOH. For period costs, note if it's S or A$.$ Classify All costs as either For V$.$ Also, classify all product costs as direct or indirect, assuming that the cost object is each unit of product manufactured.

Product Cost

Direct Materials

$($DM$),$ Direct

Labor $($DL$).$

Manufacturing

Overhead $($MOH$)$

Period Cost

Selling $($S$),$

Fixed $($F$),$

Administrative

$($A$)$ or other $(0)$

Variable

$($V$)$ or could be both $($B$)$

Direct

$($D$)$ or

Indirect

$(1)$

Norris

Ashley

$1015-12$:

$2$

$$

$5$

$6$

$8$

$9$

Insurance on the manufacturing facilities

Wages for employees in the assembly department

Wood used in chairs

Rent for the sales outlet in Sacramento

Electricity for manufacturing building

Depreciation expense on delivery trucks

Factory supervisors' salaries

Company president's salary

Depreciation of machinery

N$/$A

N$/$A

N$/$A

Problem $3(20$ points$)$

Martinez Company's relevant range of production is $7,500$ units to $12,500$ units. When it produces and sells $8,500$ units, its average costs per unit are as follows:

Direct materials

Direct labor

Variable manufacturing overhead

Fixed manufacturing overhead

Fixed selling expense

Fixed administrative expense

Sales commissions

Variable administrative expense

Average Cost per

Unit

$$7\mathrm{.}60$

$$3\mathrm{.}20$

$$1\mathrm{.}75$

$$5\mathrm{.}00$

$$2\mathrm{.}50$

$$2\mathrm{.}00$

$$1\mathrm{.}10$

$$0\mathrm{.}60$