Question

PB4.

LO 2.2Pocket Umbrella, Inc, is considering producing a new type of umbrella. This new pocket-sized umbrella would fit into a coat pocket or purse. Classify the following costs of this new product as direct materials, direct labor, manufacturing overhead, or selling and administrative.6

Cost of advertising the product
Fabric used to make the umbrellas
Maintenance of cutting machines used to cut the umbrella fabric so it will fit the umbrella frame
Wages of workers who assemble the product
President’s salary
The salary of the supervisor of the people who assemble the product
Wages of the product tester who stands in a shower to make sure the umbrellas do not leak
Cost of market research survey
Salary of the company’s sales managers
Depreciation of administrative office building

Answer 1

Step-by-step explanation:

Cost of advertising the product - Selling & Administrative Cost

Fabric used to make the umbrellas -Direct Materials Cost

Maintenance of cutting machines used to cut the umbrella fabric so it will fit the umbrella frame -Manufacturing overhead Cost

Wages of workers who assemble the product - Direct labour Cost

President's salary - Selling & Administrative Cost

The salary of the supervisor of the people who assemble the product - Selling & Administrative Cost

Wages of the product tester who stands in a shower to make sure the umbrellas do not leak - Direct labour Cost

Cost of market research survey - Selling & Administrative Cost

Salary of the company's sales managers - Selling & Administrative Cost

Depreciation of administrative office building - Selling & Administrative Cost