1- Use the information below for Darwin Company to answer the question that foll
ID: 2544491 • Letter: 1
Question
1- Use the information below for Darwin Company to answer the question that follow.
Darwin Company's product costs are
2- Which of the following is not a prime cost?
a.machine operator wages
b.assembly line wages
c.direct labor wages
d.plant janitor's wages
3- An example of a period cost is
a.indirect materials
b.advertising expense
c.depreciation on factory equipment
d.property taxes on plant facilities
Sales $76,500 Direct materials used 7,300 Depreciation on factory equipment 4,700 Indirect labor 5,900 Direct labor 10,500 Factory rent 4,200 Factory utilities 1,200 Sales salaries expense 15,600 Office salaries expense 8,900 Indirect materials 1,200Explanation / Answer
2. Which of the following is not a prime cost?
Ans: plant janitor's wages.
Prime Cost is the direct cost of a commidity but Janitor wages is not a direct cost of a commodity.
3. An example of a period cost is
Ans: b: Advertising expense.
Period cost are costs for activities other than production of the product. Advertisment expense does not form part of production cost. hence its a period cost.
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