c. Complies with accounting standards d. Usually confidential e. Reports past pe
ID: 2540412 • Letter: C
Question
c. Complies with accounting standards d. Usually confidential e. Reports past performance T ses physical measures as well as monetary ones for reports g. Driven by user needs h. Focuses on business decision making Elements of Manufacturing Costs SE2. CONCEP sified as direct material LO2 T Stoney Saure, Votives, Inc.'s accountant, must group the costs manufacturing tealights. Indicate whether cach of the following items should be clas- s (DM), direct labor (DL), overhead (O), or none of these (N). dicate whether each is a prime cost (PC), a conversion cost (CC), or neither (N) lore than one answer per category may apply.) a. Cost of wax b. Depreciation of the cost of vats to hold melted wax c. Cost of Gigi's time to dip the wicks into the wax d. Rent on the factory where candles are made e. Cost of coloring for candles . Steve's commission to sell candles to Brightlights, Inc. g. Cost of Ramos's time to design candles for HalloweenExplanation / Answer
a. Direct material: Since it is part and parcel of the product to be produced.
b. Overheads: Cost not directly related to business.
c. Direct Labour: Time usually indicates the human resources way of working.
d. Overheads: Indirect expenses not related to business.
e. Direct Materials; Since it is directly related to the part and parcel of the product.
f. None of these: Since it's an marketing and admin expense not related to the production department.
g. Direct labour: Since labour is directly involved in making the product
Prime cost involves the summary of direct materials and direct labour where the conversion costs involves the summary of manufacturing overheads.
Prime costs: a, c, e, g
Conversion costs: b, d
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