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Distinguishing between direct and indirect costs Granger Cards is a manufacturer of greeting cards. Classify its costs by matching the costs to the terms.

  1. Direct materials
  2. Direct labor
  3. Indirect materials
  4. Indirect labor
  5. Other manufacturing overhead

a. Artists’ wages

b. Wages of materials warehouse workers

c. Paper

d. Depreciation on manufacturing equipment

e. Manufacturing plant manager’s salary

f. Property taxes on manufacturing plant

g. Glue for envelopes

Short Answer

Expert verified

Direct labor includes wages which is directly associated with the production process and the required matching is done.

Step by step solution

01

Definition of direct labor

Direct labor is defined as the cost incurred by a business to compensate the employees who are directly involved in the production press.

02

Matching

Direct and indirect cost

Costs

1 Direct Material

C

2 Direct Labor

A

3 Indirect Material

G

4 Indirect Labor

B, E

5 Other manufacturing overhead

D, F

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Most popular questions from this chapter

Calculating cost of goods sold for merchandising and manufacturing companies

Below are data for two companies:

Company 1 Company 2

Beginning balances:

Merchandise Inventory \( 11,600

Finished Goods Inventory \) 15,400

Ending balances:

Merchandise Inventory 12,400

Finished Goods Inventory 11,300

Net Purchases 152,500

Cost of Goods Manufactured 214,500

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Beginning Direct Ending Direct Direct Manufacturing Overhead Total Total Ending Direct Materials Beginning Direct Materials Purchases of Direct Materials \( 27,000 \) X \( X X X (25,000) 180,000 44,000 \) X 56,000 84,000 (20,000) ELLY MANUFACTURING COMPANY

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