Response to the following problem:
Jordan Industries is a manufacturing company that produces solid oak office furniture. During the year, the following costs were incurred. The building depreciation and the utilities are allocated three-fourths to production and one-fourth to administration. The cost of furniture parts can be traced to specific production runs.
Oak wood. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $90,000
Miscellaneous supplies (glue, saw blades, varnish, etc.) . . . . . . . . . . . . . . . . . . . . . . . . 2,500
Furniture parts (wheels, locks, etc.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,500
Payroll-plant manager's salary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,000
Payroll-administrative salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,000
Payroll-production-line employees' wages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67,500
Building depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000
Maintenance-plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,000
Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000
1. Classify the costs into the following four categories: direct materials, direct labor, manufacturing overhead, and period costs.
2. Calculate the total amount of cost for each category.