Question 1. Classify each of the following manufacturing costs as direct or indirect for automobiles:
a. insurance on manufacturing equipment
b. cost of steel plates used in making an automobile body
c. wages of assembly workers
d. salaries of plant personnel
e. cost of tires
f. overtime premiums paid to assembly workers
g. depreciation of the factory building
h. cost of electric power to operate machines
i. production workers holiday and vacation pay benefits
j. wages of materials handling workers
k. cost of seats placed in automobiles
l. quality inspection costs
Question 2. Classify the following costs as unit related, batch related, product sustaining, or business sustaining activity costs.
a. direct materials
b. set up labor wages
c. salaries of plant engineers responsible for executing engineering change orders
d. corporate office building depreciation
e. direct labor wages
f. purchase order clerk wages
g. product design engineer salaries
h. rent for plant building
i. quality inspection of first item produced in each batch
j. moving materials from one machine to the next
k. accounting
l. sales support of individual products
Question 3. The information below pertains to July production at Porter Companys paint factory, which produces for household interiors.
Work in process:
July 1-----------------------3,000------30%complete--------------------20% complete
started in July-------------7,000-------------------------------------------------------------
To account for-----------10,000-------------------------------------------------------------
Completed and
transfered out------------6,000-----100% complete------------------100% complete
Work in process
July 31---------------------4,000-----25% complete---------------------10% complete
Using the weighted average method, determine the number of equivalent units of production for materials and conversion during July.