Explore BrainMass

Explore BrainMass

    2-1 Classifying Manufacturing Costs

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Boating, Inc., assembles custom sailboats from components supplied by various manufacturers. The company is very small and its assembly shop and retail sales store are housed in a boathouse in Charleston SC. Below are listed some of the costs that are incurred at the company.
    For each cost, indicate whether it would most likely be classified as direct labor, direct materials, manufacturing overhead, selling, or an administrative cost.

    1. The wages of employees who build the sailboats.
    2. The cost of advertising in the local newspapers.
    3. The cost of an aluminum mast installed in a sailboat.
    4. The wages of an aluminum mast installed in a sailboat.
    5. Rent on the boathouse.
    6. The wages of the company's bookkeeper.
    7. Sales commissions paid to the company's salespeople.
    8. Depreciation on power tools.

    © BrainMass Inc. brainmass.com March 4, 2021, 9:59 pm ad1c9bdddf
    https://brainmass.com/business/accounting/classifying-manufacturing-costs-290132

    Solution Preview

    1. The wages of employees who build the sailboats. - Direct labor cost.

    2. The cost of advertising in the local newspapers. - Marketing and selling cost.

    3. The cost of an aluminum mast installed in ...

    Solution Summary

    This exercise identifies direct labor, direct materials, manufacturing overhead, selling, and administrative cost of a small business that assembles custom sailboats from components supplied by various manufacturers.

    $2.49

    ADVERTISEMENT