3) 3) Steuben Company produces dog houses During the current year, Steuben Compa

Question

3) 3) Steuben Company produces dog houses During the current year, Steuben Company incurred the following costs Rent on manufacturing facility Office manager's salary Wages of factory machine operators Depreciation on manufacturing equipment $134,000 84,000 64,000 34,000 24,000 94,000 and taxes on selling and administrative offices Direct materials purchased and used on the above information, the amount of period costs shown on Steuben's income statement is A) $24,000 B) $242,000 C) $84,000 D) $108,000 4) Randall Company manufactures chocolate bars. The following were among Randall's manufacturing costs during the current year Wages Machine operators $320,000 $77,000 Selling and administrative personnel Materials used Lubricant for oiling machinery Cocoa, sugar, and other raw materials $27,000 $270,000 $210,000 Packaging materials Randall's direct labor costs amounted to: A) $499,000 B) $179,000 C) $422,000 D) $320,000 5) Which of the following costs would be classified as a direct cost for a company that produces motorcycles? A) Rent of manufacturing facility that produces motorcycles B) Wages of motorcycle assembly workers C) Both seats used in the motorcycles and wages of motorcycle assembly workers ar correct D) Seats used in the motorcycles 6) Which of the following costs should be recorded as an expense as it is incurred? A) Administrative employee salaries B) Insurance for the factory building C) Depreciation of manufacturing equipment D) All of these are expenses

Explanation / Answer

No Answer Explanation 3 D Office manager salary - 84000 Plus Insurance and taxes on selling and adm office - 24,000 4 D Machine operators wages are direct labor costs 5 C Option c is correct 6 A B and C are part of factory overhead and not immediately expensed. 7 D Office supplies are immediately expensed 8 A Only A is TRUE 9 B General, selling and administrative expenses are expensed when incurred but not on payment 10 D Office managers salary is not a product cost

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