You have just been hired by EduRom Company, which was organized on January 2 of

ID: 2543819 • Letter: Y

Question

You have just been hired by EduRom Company, which was organized on January 2 of the current year. The company manufactures and sells a variety of educational DVDs for personal computers. It is your responsibility to supervise the employees who take orders from customers over the phone and to arrange for shipping orders via Federal Express, Canada Post, and other freight carriers.

The company is unsure how to classify your annual salary in its cost records. The company's cost analyst says that your salary should be classified as a manufacturing (product) cost; the controller says that it should be classified as a selling expense; and the president says that it doesn't matter which way your salary cost is classified.

Required:

1 Which viewpoint is correct? Why?

2. From the point of view of the reported operating income for the year, is the president correct in saying that it doesn't matter which way your salary cost is classified? Explain.

Explanation / Answer

From president viewpoint is correct because it was organized by own. From the point of view of the reported operating income for the year,yes the president correct in saying that it doesn't matter which way your salary cost is classified.Because he had receiving order from customer over phone and manufacture and selling the same product.

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You have just been hired by EduRom Company, which was organized on January 2 of

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You have just been hired by EduRom Company, which was organized on January 2 of

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