90.2K

Verified Solution

Link Copied!

Using the data presented above do the following classify the cost as either product costs or period coats using a five column table as shown below enter the dollar amount of each cost in the appropriate column and total each classification.

Cost Items and Account Balances Administrative salaries Advertising for helmets Cash, December 1 Depreciation on factory building Depreciation on office equipment Insurance on factory building Miscellaneous expenses factory Office supplies expense Professional fees Property taxes on factory building Raw materials used Rent on production equipment Research and development Sales commissions Utility costs-factory Wages-factory Work in process, December 1 Work in process, December 31 Raw materials inventory. December 1 Raw materials inventory, December 31 Raw material purchases Finished goods inventory, December 1 $15,500 11,000 0 1,500 800 1,500 1,000 300 500 400 70,000 6,000 10.000 40,000 900 70,000 70,000 10,000 Production and Sales Data Number of helmets produced Expected sales in units for December ($40 unit sales price) Expected sales in units for January Desired ending inventory Direct materials per finished unit Direct materials cost Direct labor hours per unit Direct labor hourly rate 8,000 10,000 20% of next month's sales 1 kilogram $7 per kilogram .35 $20 Cash Flow Data Cash collections from customers: 75% in month of sale and 25% the following month. Cash payments to suppliers: 75% in month of purchase and 25% the following month. Income tax rate: 45%. Cost of proposed production equipment: $720,000. Manufacturing overhead and selling and administrative costs are paid as incurred. Desired ending cash balance: $30,000. Direct Materials Product Costs Direct Manufacturing Labor Overhead Item Period Costs

Answer & Explanation Solved by verified expert

See Answer