Value chain classificationsMatch each of the following cost items

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Exercise 13.8


Value
chain classifications
Match each of the following cost items with
the value chain business function where you would expect the cost to be
incurred:



Business Function Cost
Item


a. Research and development 1. Labor time
to repair products under warranty f


b. Design 2.
TV commercial spots d


c. Production 3.
Labor costs of filling customer orders e


d. Marketing 4.
Testing of competitor’s product a


e. Distribution 5.
Direct manufacturing labor costs _c_____


f. Customer service 6.
Development of order tracking system for the Internet a______


7. Printing cost of new product brochures ______ d


8. Hours spent designing childproof bottles ______a
& b


9. Training costs for representatives to staff the
customer call center a & f


10. Installation of robotics equipment in manufacturing
plant ______c




Exercise 13.10


Cost
classifications
For each of the following costs, check the
columns that most likely apply (both variable and fixed might apply for some
costs).


















Product

Direct

Indirect

Period

Variable

Fixed

Raw materials

x

_____

_____

x

_____

Staples used to secure packed
boxes of product

_____

x

_____

x

_____

Plant janitors’ wages

_____

x

_____

x

x

Order processing clerks’ wages

_____

_____

x

x

_____

Advertising expenses

_____

_____

x

_____

x

Production workers’ wages

x

_____

_____

x

_____

Production supervisors’ salaries

_____

x

_____

_____

x

Sales force commissions

_____

_____

x

x

_____

Maintenance supplies used

_____

x

_____

x

_____

President’s salary

_____

_____

x

_____

x

Electricity cost for office
building

_____

x

x

x

x

Real estate taxes for factory

_____

x

_____

_____

x

Real estate taxes for office
building

_____

_____

x

_____

x



Exercise 13.12


Cost
classifications
College Carriers manufactures backpacks that
are sold to students for use as book bags.



Required:


Identify a specific item in this company’s manufacturing,
selling, or administrative processes for which the cost would be classified as



a.
Raw material.


b.
Direct labor.


c.
Variable manufacturing overhead.


d.
Fixed manufacturing overhead.


e.
Fixed administrative expense.


f.
Fixed indirect selling expense.


g.
Variable direct selling expense.




Exercise
13.14


Product
costing—manufacturing overhead
Nautical Accessories,
Inc., manufactures women’s boating hats. Manufacturing overhead is assigned to
production on a machine-hour basis. For 2016, it was estimated that
manufacturing overhead would total $359,520 and that 21,400 machine hours would
be used.



Required:


a.
Calculate the predetermined overhead
application rate that will be used for absorption costing purposes during 2016.


b.
During April, 3,900 hats were made. Raw
materials costing $6,240 were used, and direct labor costs totaled $9,165. A
total of 780 machine hours were worked during the month of April. Calculate the
cost per hat made during April.


c.
At the end of April, 1,050 hats were in ending
inventory. Calculate the cost of the ending inventory and the cost of the hats
sold during April.


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