The cost of direct materials to make automobiles would include the cost of the windshields

Preparing an income statement and calculating unit cost for a service company The Glass Doctors repair chips in car windshields. The company incurred the following operating costs for the month of July 2018: Salaries and wages $ 10,000Windshield repair materials 4,100 Depreciation on truck 500 Depreciation on building and equipment 900 Supplies used 450 Utilities 4,550 The Glass Doctors earned $25,000 in service revenues for the month of July by repairing 250 windshields. All costs shown are considered to be directly related to the repair service. (adsbygoogle = window.adsbygoogle || []).push({}); Requirements 1. Prepare an income statement for the month of July. 2. Compute the cost per unit of repairing one windshield, rounded to the nearest cent. 3. The manager of The Glass Doctors must keep unit operating cost below $80 per windshield in order to get his bonus. Did he meet the goal?

The net operating income is $4,500, the unit cost is $82and the manager was not able to meet the goal.

Classifying Costs as Materials, Labor, or Factory Overhead

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:

Solution EX 1-1Direct Materialsa.V8 automobile engineb.Steering wheelc.Wheelsd.Glass used in the vehicle's windshieldDirect Labora.Wages of assembly line workerFactory Overheadsa.Depreciation of robotic assembly line equipmentb.Painting safety masks for employees working in the paint roomc.Salary of test driverSolution EX1-2 Classifying costs as materials, labor, or factory overheadOBJ. 2S. No.CostCost Classificationa.Plant manager salary for the Iowa City,Iowa, plantFactory Overheadb.Maintenance suppliesFactory Overheadc.Salary of process engineersFactory Overheadd.Wages paid to Packaging Departmentemployees in the Bear River City, Utah,paper products plantDirect Labore.Scents and fragrances used in makingsoaps and detergentsDirect Materialf.Wages of production line employees at thePineville, Louisiana, soap and detergentplantDirect Laborg.Depreciation on assembly line in theMehoopany, Pennsylvania, paper productsplantFactory Overheadh.Packaging materialsDirect Materiali.Resins for body wash productsDirect Materialj.Depreciation on the Auburn, Maine,manufacturing plantFactory Overhead

Upload your study docs or become a

Course Hero member to access this document

Upload your study docs or become a

Course Hero member to access this document

End of preview. Want to read all 7 pages?

Upload your study docs or become a

Course Hero member to access this document

Tags

Managerial Accounting, Assignment 1, Carl S Warren, Assignment Period Cost Product, James M Reeves, Chief financial officer, period cost

Is windshield a direct material?

Is an automobile engine a direct material?

Which of the following is a manufacturing overhead cost for an automobile manufacturer?

Is the sum of direct materials cost and direct labor cost?