Part 1:  Assume we’re operating a company that produces and sells baked goods to retail outlets. The

company’s infrastructure consists of a leased factory (production) facility where all of the baking is done, and there are sales and administrative offices located in a separate building leased at another location. Identify whether each of the following expense items for this company would be categorized as a PRODUCT COST or a PERIOD COST by placing an “X” in the appropriate box for each item. Note that each type of expense is either a product cost or a period cost, but not both. The first item has already been completed for you.

Part 2:  For the same company and scenario described in Part 1 above, identify whether each of the following expense items for this company would be categorized as a DIRECT COST or an INDIRECT COST by placing an “X” in the appropriate box for each item. Note that each type of expense is either a direct cost or an indirect cost, but not both. The first item has already been completed for you.

Part 3:  For the same company and scenario described in Part 1 above, identify whether each of the following expense items for this company would be categorized as a VARIABLE COST or a FIXED COST by placing an “X” in the appropriate box for each item. While a couple of these items might arguably be considered “mixed” costs based on the situation, please just choose either variable cost or fixed cost for each. The first item has already been completed for you.

Part 4:  For the same company and scenario described in Part 1 above, categorize each expense below as direct material, direct labor, indirect material, indirect labor, other manufacturing overhead or a period cost by placing an “X” in the appropriate box for each item. Once again, note that only one selection will apply to each item. The first item has already been completed for you.

Part 5:  If we were to calculate each of the four cost category groupings shown in the first column below (e.g., total manufacturing overhead), which of the various expense items listed across the top of the table would need to be included? Place an “X” in each expense item that would need to be included in calculating the sum for each separate cost category shown, and be aware it’s likely that more than one expense item will apply in each calculation. Note that we are not actually calculating any values, but are instead simply showing the components for each aggregated cost category listed. The first cost category (total manufacturing overhead) has already been completed for you.

Attached is the word version of the assignment.  ATTACHMENT PREVIEW Download attachmentPart 1:Assume we’re operatng a company ThaT produces and sells baked goods To reTail ouTleTs. ±hecompany’s infrasTrucTure consisTs of a leased facTory (producton) faciliTy where all of The baking is done,and There are sales and adminisTratve oFces locaTed in a separaTe building leased aT anoTher locaton.Identfy wheTher each of The following expense iTems for This company would be caTegorized as aPRODUC± COS± or a PERIOD COS± by placing an “X” in The appropriaTe box for each iTem. NoTe ThaT eachType of expense is eiTher a producT cosTora period cosT, buTnotboTh. ±he ²rsT iTem has already beencompleTed for you.Expense ItemPRODUCT COSTPERIOD COST³acTory insuranceXCompany presidenT’s salaryBakers’ wagesDepreciaton expense on bake ovens³acTory utlites³acTory leaseAdvertsing cosTs³acTory supervisors’ salariesSales commissions³lour used in baking breadPart 2:³or The same company and scenario described in ParT 1 above, identfy wheTher each of Thefollowing expense iTems for This company would be caTegorized as a DIREC± COS± or an INDIREC± COS±by placing an “X” in The appropriaTe box for each iTem. NoTe ThaT each Type of expense is eiTher a direcTcosToran indirecT cosT, buTnotboTh. ±he ²rsT iTem has already been compleTed for you.Expense ItemDIRECT COSTINDIRECT COST³acTory insuranceXBakers’ wagesEggs used for bakingDepreciaton expense on bake ovens³acTory leaseCleaning maTerials for bake ovens³acTory utlites³acTory supervisors’ salariesLubricanT for facTory equipmenT³lour used in baking bread

View the AnswerPart 3:For the same company and scenario described in Part 1 above, idenTfy whether each of thefollowing expense items for this company would be categorized as a VARIABLE COS± or a FIXED COS± byplacing an “X” in the appropriate box for each item. While a couple of these items might arguably beconsidered “mixed” costs based on the situaTon, please just choose either variable cost or ²xed cost foreach. ±he ²rst item has already been completed for you.Expense ItemVARIABLE COSTFIXED COSTFlour used in baking breadXFactory supervisors’ salaries(note that these employees are SALARIED)Factory leaseFactory insuranceFactory exterior lawn care maintenance contractSales commissionsBakers’ wages(note that these employees are PAR±-±IME HOURLY)DepreciaTon expense on bake ovens(assume annual straight-line depreciaTon is applied)AdverTsing costs(assume these expenses are budgeted annually)Factory uTliTes(this is a tricky one…just give it your best shot)Part 4:For the same company and scenario described in Part 1 above, categorize each expense below asdirect material, direct labor, indirect material, indirect labor, other manufacturing overhead or a periodcost by placing an “X” in the appropriate box for each item. Once again, note that only one selecTon willapply to each item. ±he ²rst item has already been completed for you.Expense ItemDirectMaterialDirectLaborIndirectMaterialIndirect LaborOtherManufacturingOverheadPeriodCostsFlour used in baking breadXFactory supervisors’ salariesFactory leaseFactory insuranceFactory custodians’ wagesSales commissionsBakers’ wagesDepreciaTon expense on bakeovensCompany president’s salaryFactory uTliTesAccounTng department salariesDepreciaTon expense onadministraTve o³ce equipmentLubricant for factory equipment

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