Question

Indicate whether each of the following costs of an automobile manufacturer would be classified as direct materials cost, direct labor cost, or factory overhead cost:Cost Classificationa. Wheelsb. Glass used in the vehicleâs windshieldc. Wages of assembly line workerd. V8 automobile enginee. Depreciation of robotic assembly line equipmentf. Steering wheelg. Painting safety masks for employees working in the paint roomh. Salary of test driver

Answer 1

Following should be the allocation of various costs:

a. Wheels: Direct Material Cost

b.Glass used in the vehicle: Direct Material Cost

c. Glass used in the vehicle windshield: Direct Material Cost

d. Wages of assembly line workers : Direct Labor Cost

e. Automobile engine: Direct Material Cost

f. Depreciation of robotic assembly: Factory Overhead Cost

g. Steering wheel: Direct Material Cost

h. Painting safety masks for employees working in the paint room: Factory Overhead Cost

i. Salary of test driver: Factory Overhead Cost