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Chapter 16: 19RQ (page 885)
How does a service company calculate unit cost per service?
The cost per service is computed by dividing the total number of services produced by total costs.
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ABC Cleaning Company cleaned 45 offices and incurred costs of $2,340. What was the cost to clean each office?
Identifying product costs and period costs Classify each cost of a paper manufacturer as either a product cost or a period cost:
a. Salaries of scientists studying ways to speed forest growth.
What are prime costs? Conversion costs?
Identifying product costs and period costs Classify each cost of a paper manufacturer as either a product cost or a period cost:
e. Cost of chemicals to treat the paper.
Distinguishing between direct and indirect costs Granger Cards is a manufacturer of greeting cards. Classify its costs by matching the costs to the terms.
a. Artists’ wages
b. Wages of materials warehouse workers
c. Paper
d. Depreciation on manufacturing equipment
e. Manufacturing plant manager’s salary
f. Property taxes on manufacturing plant
g. Glue for envelopes
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