Question

Indicate whether each of the following costs of a pencil manufacturer would be classified as direct materials (DM), direct labor (DL), or manufacturing overhead (MO). a. ____ Depreciation of pencil painting machinery b. ____ Lead inserted into pencils c. ____ Factory utilities d. ____ Wages of assembly line worker e. ____ Salary of supervisor f. ____ Factory machinery maintenance g. ____ Wood

Answer 1

A.	Manfacturing Overhead	Depreciation of Pencil painting machinery
B	Direct Material	Lead Inserted into pencils
C	Manfacturing Overhead	Factory utilities
D	Direct Labour	Wages of assembly line worker
E	Manfacturing Overhead	Salary of supervisor
F	Manfacturing Overhead	Factory machinery maintenance
G	Direct material	Wood
Reasons :
A.	Manfacturing Overhead costs are like factory overheads , that involves company's manfacturing operations. Since Factory equipment relates to manfacturing overhead
B	Direct material is the raw material used for the production, so here lead is a DM
C	Manfacturing Overhead costs are like factory overheads , that involves company's manfacturing operations.
D	Wages are related to the labours payment, so it is linked to Direct labour cost
E	Supervisors salary are related to the Manfacturing operations , so it can be treated as manfacturing overhead
F	Manfacturing Overhead costs are like factory overheads , that involves company's manfacturing operations.
G	Direct material is the raw material used for the production, so here wood is a DM