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

					Product cost			period cost
					direct	Direc	FOH	Selling&
					materials	labor		adm exp
potatoes					XXX
wages of Factory Janitor							XXX
wages of raw potato inspectors							XXX
insurance on factory machines							XXX
cleaning solvent for the factory floor							XXX
cooking oil							XXX
salt							XXX
rent paid for factory buildings							XXX
Depreciation on corporate offices								XXXX
Electric power consumed in operating factory machines							XXX
Wages of the production supervisor							XXX
Wages of machine operators						XXX
potato chip bags							XXX
Boxes								XXX
Electricity used in lighting corporate offices								XXX