Question

1. Classify the following as direct materials, direct labor, factory overhead, or selling and administrative expense.  

Potatoes

Wages of factory janitor

Wages of raw potato inspectors

Insurance on factory machines

Cleaning solvent for the factory floor

Cooking oil

Salt

Rent paid for factory buildings

Depreciation on corporate offices

Electric power consumed in operating factory machines

Wages of the production supervisor

Wages of machine operators

Potato chip bags

Boxes

Electricity used in lighting corporate offices

Answer 1

Particulars	Classification
Potatoes	Direct Material
Wages of factory janitor	Factory Overhead
Wages of raw potato inspectors	Factory Overhead
Insurance on factory machines	Factory Overhead
Cleaning solvent for the factory floor	Factory Overhead
Cooking oil	Direct Material
Salt	Direct Material
Rent paid for factory buildings	Factory Overhead
Depreciation on corporate offices	Factory Overhead
Electric power consumed in operating factory machines	Factory Overhead
Wages of the production supervisor	Selling and administrative expenses
Wages of machine operators	Direct wages
Potato chip bags	Selling and administrative expenses
Boxes	Selling and administrative expenses
Electricity used in lighting corporate offices	Selling and administrative expenses