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Identify each cost as a period cost or a product cost. If it is a product cost, further indicate if the cost is direct materials, direct labor, or manufacturing overhead. Then determine if the product cost is a prime cost and/or a conversion cost.

6. Wages of assembly line workers for a factory

Short Answer

Expert verified

It is product cost, direct labor, prime cost as well as conversion cost.

Step by step solution

01

Definition of wages

The wages are defined as the remuneration paid by the business to their employees and workers for the work performed by them.

02

Step 2:Identification of costs

The wages of assembly line workers are considered as the product cost, the product cost is the cost of making a product or purchasing a product.

It is the direct labor as it is the cost incurred on labor that is directly associated with the production of goods.

It is a prime cost as well as the conversion cost.

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Most popular questions from this chapter

Identifying product costs and period costs Classify each cost of a paper manufacturer as either a product cost or a period cost:

d. Salaries of the companyโ€™s top executives.

The Institute of Management Accountantsโ€™ Statement of Ethical Professional Practice requires managerial accountants to meet standards regarding competence, confidentiality, integrity, and credibility. Consider the following situations. Which standard(s) is(are) violated in each situation?

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Preparing an income statement and calculating unit cost for a merchandising company

Dillon Young owns Dillonโ€™s Pets, a small retail shop selling pet supplies. On December 31, 2018, the accounting records for Dillonโ€™s Pets showed the following:

Merchandise Inventory on December 31, 2018 $ 10,500

Merchandise Inventory on January 1, 2018 16,000

Net Sales Revenue 56,000

Utilities Expense for the shop 3,200

Rent for the shop 4,100

Sales Commissions 2,750

Purchases of Merchandise Inventory 25,000

Requirements

1. Prepare an income statement for Dillonโ€™s Pets for the year ended December 31, 2018.

2. Dillonโ€™s Pets sold 5,550 units. Determine the unit cost of the merchandise sold, rounded to the nearest cent.

Computing cost of goods manufactured

Use the following inventory data for Caddy Golf Company to compute the cost of goods manufactured for the year:

Direct Materials Used $ 12,000

Manufacturing Overhead 21,000

Work-in-Process Inventory:

Beginning Balance 1,000

Ending Balance 5,000

Direct Labor 9,000

Finished Goods Inventory:

Beginning Balance 18,000

Ending Balance 4,000

Identify the following characteristics as primarily related to financial accounting (FA) or managerial accounting (MA): 1. Helps creditors make lending decisions

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