Chap 12 Probs 16 & 17 Help Save & Exit Submit Saved Check my work 2 Thornton Man

Question

Chap 12 Probs 16 & 17 Help Save & Exit Submit Saved Check my work 2 Thornton Manufacturing Company makes tents that it sells directly to camping enthusiasts through a mail-order marketing program. The company pays a quality control expert $115,050 per year to inspect completed tents before they are shipped to customers. Assume that the company completed 1,580 tents in January and 1,190 tents in February. For the entire year, the company expects to produce 19,500 tents. 10 points Required c. If the cost objective is to determine the cost per tent, is the expert's salary a direct or an indirect cost? d. How much of the expert's salary should be allocated to tents produced in January and February? Book References d. Complete this question by entering your answers in the tabs below Required C Required D If the cost objective is to determine the cost per tent, is the expert's salary a direct or an indirect cost? the expert's salary a direct or an indirect cost? Required C Required D> Hill Prey

Explanation / Answer

© if the cost objective is to detemine the the cost per unit the Expert salary is "Indirect cost". Because Inspection of tent is made only after Completing tent. It did not add any value addition. It is an indirect cost that is required to make tent ready to sale after Quality control. (d) Allocation of Expert salary for the month january and february Cost allocated per tent = Annual Expert Salary / Annual production =$115050/19500 =$5.90 Month Tent Produced Cost per tent Allocated cost january 1580 $5.90 9322 February 1190 $5.90 7021

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