Manufacturing firms-merchandising firms-service firms


Problem: The following are cost associated with manufacturing firms, merchandising firms, or service firms:

A. Legal services for an accounting firm

B. Car leases for company management

C. Oil used to serve manufacturing equipment

D. Office supplies for a grocery store

E. Entertainment expense for clients

F. Travel expenses for doctors in a medical firm

G. Plastic used in making computers

H. Collections cost of accounts receivable

I. Electricity to run saws at a lumber yard

J. Food for a company banquet

K. Advertising expense

L. Continuing education for a doctor

M. Commission paid to a sales person

N. Depreciation on sports equipment by a professional football team

O. Calculators used by office employees

P. Fuel used by baggage transporters at an airport

Q. Toll charges incurred because of business travel

R. Fuel used in manufacturing equipment

Classify the cost as (1) product or period (2) variable or fixed; and (3) for those that are product cost, as direct materials, direct labor, or manufacturing overhead. Write "not applicable (N/A)" if a category does not apply.

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Finance Basics: Manufacturing firms-merchandising firms-service firms
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