152. HiFi Sound Systems produces speakers for movie theaters that sell for $1,200 each. Listed below are selected cost items for the production of 600 units.
Cost by Behavior
Cost by Function
Variable
Fixed
Product
Period
Plastic for speaker casings
$150,000
Assembly labor
200,000
Factory property taxes
22,000
Accounting staff salaries
75,000
Sales office rent
10,000
Sales manager’s salary
60,000
Depreciation on factory equipment
23,000
Sales commissions
36,000
Classify each cost as either fixed or variable, and either a product or a period cost.
153. The following costs are incurred by a manufacturing company. Classify each cost item as either a period cost or a product cost. If the cost is a product cost, identify it as a prime and/or conversion cost.
Period Cost
Product Cost
Prime Cost
Conversion Cost
Payroll taxes for assembly labor
Depreciation of factory equipment
Insurance on delivery vehicles
Indirect materials used
Wages of production workers
Production supervisor’s salary
Advertising
Direct materials used
Sales salaries
154. Assume Back to the Roots used 1 million pounds of raw materials in their most recent accounting year. They started the year with 20,000 pounds of raw materials and ended with 40,000 pounds.
(a) Compute Back to the Roots’ raw materials inventory turnover.(b) Compute Back to the Roots’ days’ sales in raw materials inventory.(c) Interpret these results. What can the company do to improve these measures?
Already registered? Login
Not Account? Sign up
Enter your email address to reset your password
Back to Login? Click here