The PC Works assembles
custom computers from components supplied by various manufacturers. The company
is very small and its assembly shop and retail sales store are housed in a
single facility in a Redmond, Washington, industrial park. Listed below are some
of the costs that are incurred at the company.
Required:
For each cost,
indicate whether it would most likely be classified as direct materials, direct
labor, manufacturing overhead, selling, or an administrative cost.
1.The cost of a hard
drive installed in a computer.
Direct labor cost
Direct materials cost
Correct
Manufacturing overhead cost
Selling cost
Administrative cost
2. The cost of
advertising in the Puget Sound Computer User newspaper.
Direct labor cost
Direct materials cost
Manufacturing overhead cost
Selling cost
Correct
Administrative cost
3.The wages of employees who
assemble computers from components.
Direct labor cost
Correct
Direct materials cost
Manufacturing overhead cost
Selling cost
Administrative cost
4.Sales commissions paid to the
company’s salespeople.
Direct labor cost
Direct materials cost
Manufacturing overhead cost
Selling cost
Correct
Administrative cost
5.The salary of the assembly
shop’s supervisor.
Direct labor cost
Direct materials cost
Manufacturing overhead cost
Correct
Selling cost
Administrative cost
6.The salary of the company’s
accountant.
Direct labor cost
Direct materials cost
Manufacturing overhead cost
Selling cost
Administrative cost
Correct
7.Depreciation on equipment
used to test assembled computers before release to customers.
Direct labor cost
Direct materials cost
Manufacturing overhead cost
Correct
Selling cost
Administrative cost
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