EE Manufacturing makes a full line of exercise equipment. Which of the following
ID: 2564003 • Letter: E
Question
EE Manufacturing makes a full line of exercise equipment. Which of the following costs would be considered part of EE's manufacturing overhead? (Select the six that apply.) a. Setup cost to change from one piece of equipment to another. b. Research cost incurred to develop new types of equipment. c. Wages of employees who assemble the product. d. Cost of the oil used to cut metal tubing. e. Cost of shipping equipment to customers. f. Freight cost paid to get raw materials. g. Salary of the quality control inspector. h. Insurance on the factory building. i. Depreciation on the factory equipment. j. Factory supervisors' salaries.
Explanation / Answer
Activity considered as part of manufacturing overhead Setup cost to change from one piece of equipment to another yes since set up is a part of manufacturing process Research cost incurred to develop new types of equipment. No This cost will be expensed in the year of incurrence and not be part of manufacturing overhead Wages of employees who assemble the product No Direct labor cost ost of the oil used to cut metal tubing. yes oil is used in a manufacturing proces Cost of shipping equipment to customers No outward cost Freight cost paid to get raw materials No wil be addedto cost of inventory Salary of the quality control inspector Yes part of mnaufacturing process Insurance on the factory building. yes as related to factory Depreciation on the factory equipment yes as related to factory Factory supervisors' salaries. yes as related to factory
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