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Ex 16. 2 (Basic Types of Manufacturing Costs) Into which of the three elements of manufacturing cost would each of the following be classified? a. Tubing used in manufacturing bicycles. b. Wages paid by an automobile manufacturer to employees who test-drive completed automobiles. c. Property taxes on machinery. d. Gold bullion used by a jewelry manufacturer. e. Wages of assembly-line workers who package frozen food. f. Salary of plant superintendent. g. Electricity used in factory operations. h. Salary of nurse in a factory first-aid station. Ex. 16. 3 (Product Costs and Period Costs)

Indicate whether each of the following should be considered a product cost or a period cost. If you identify the item as a product cost, also indicate whether it is a direct or an indirect cost. For example, the answer to item 0 is “indirect product cost. ” Begin with item a. 0. Property taxes on factory building. a. Cost of disposal of hazardous waste materials to a chemical plant. b. Amounts paid by a mobile home manufacturer to a subcontractor who installs plumbing in each mobile home. c. Depreciation on sales showroom fixtures. d. Salaries of security guards in an administrative office building. e.

Salaries of factory security guards. f. Salaries of office workers in the credit department. g. Depreciation on the raw materials warehouse. h. Income taxes on a profitable manufacturing company. Ex. 16. 5 (Preparing a Schedule of the Cost of Finished Goods Manufactured) The accounting records of NuTronics, Inc. , include the following information for the year ended December 31, 2007. | Dec. 31| Jan. 1| Inventory of materials| $ 24,000| $ 20,000| Inventory of work in process| 8,000| 12,000| Inventory of finished goods| 90,000| 80,000| Direct materials used| 210,000| | Direct labor| 120,000| | Selling expenses| 170,000| |

General and administrative expenses| 140,000| | Overhead is assigned to production at $192,000. a. Prepare a schedule of the cost of finished goods manufactured. (Not all of the data given above are used in this schedule. ) b. Assume that the company manufactures a single product and that 20,000 units were completed during the year. What is the average per-unit cost manufacturing this product? Ex 16. 9 (Preparing an Income Statement Using the Cost of Finished Goods Manufactured) Mayville Company, a sole proprietorship, reports the following information pertaining to its operating activities: | Ending Balance| Beginning Balance|

Materials Inventory| $ 20,000| $ 40,000| Work in Process Inventory| 29,000| 60,000| Finished Goods Inventory| 52,000| 42,000| During the year, the company purchased $30,000 of direct materials and incurred $21,000 of direct labor costs. Total manufacturing overhead for the year amounted to $18,000. Selling and administrative expenses amounted to $60,000, and the company’s annual sales amounted to $200,000. a. Prepare Mayville’s schedule of the cost of finished goods manufactured. b. Prepare Mayville’s income statement (ignore income taxes).

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