DeVry Chicago ACCT 346 ACCT346 Week 1 Homework Assignment

ACCT346 Week 1 Homework AssignmentNote that there are 5 PARTS spread over 3 PAGES for this homework assignment.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 thebaking is done, and there are sales and administrative offices located in a separate buildingleased at another location. Identify whether each of the following expense items for thiscompany would be categorized as a PRODUCT COST or a PERIOD COST by placing an “X” in theappropriate box for each item. Note that each type of expense is either a product cost or aperiod cost, but not both. The first item has already been completed for you.Expense ItemFactory insuranceCompany president’s salaryBakers’ wagesDepreciation expense on bake ovensFactory utilitiesFactory leaseAdvertising costsFactory supervisors’ salariesSales commissionsFlour used in baking breadPRODUCT COSTXXXXXXPERIOD COSTXXXPart 2: For the same company and scenario described in Part 1 above, identify whether each ofthe following expense items for this company would be categorized as a DIRECT COST or anINDIRECT COST by placing an “X” in the appropriate box for each item. Note that each type ofexpense is either a direct cost or an indirect cost, but not both. The first item has already beencompleted for you.Expense ItemFactory insuranceBakers’ wagesEggs used for bakingDepreciation expense on bake ovensFactory leaseCleaning materials for bake ovensFactory utilitiesFactory supervisors’ salariesLubricant for factory equipmentFlour used in baking breadDIRECT COSTXXXXINDIRECT COSTXXXXXXPart 3: For the same company and scenario described in Part 1 above, identify whether each ofthe following expense items for this company would be categorized as a VARIABLE COST or aFIXED COST by placing an “X” in the appropriate box for each item. While a couple of these itemsmight arguably be considered “mixed” costs based on the situation, please just choose eithervariable cost or fixed cost for each. The first item has already been completed for you.Expense ItemFlour used in baking breadFactory supervisors’ salaries(note that these employees are SALARIED)Factory leaseFactory insuranceFactory exterior lawn care maintenance contractSales commissionsBakers’ wages(note that these employees are PART-TIME HOURLY)Depreciation expense on bake ovens(assume annual straight-line depreciation is applied)Advertising costs(assume these expenses are budgeted annually)Factory utilities(this is a tricky one…just give it your best shot)VARIABLE COSTXFIXED COSTPart 4: For the same company and scenario described in Part 1 above, categorize each expensebelow as direct material, direct labor, indirect material, indirect labor, other manufacturingoverhead 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 completedfor you.Expense ItemFlour used in baking breadFactory supervisors’ salariesFactory leaseFactory insuranceFactory custodians’ wagesSales commissionsBakers’ wagesDepreciation expense on bakeovensCompany president’s salaryFactory utilitiesAccounting department salariesDepreciation expense onadministrative office equipmentLubricant for factory equipmentDirectMaterialXDirectLaborIndirectMaterialIndirectLaborOtherManufacturingOverheadPeriodCostsPart 5: If we were to calculate each of the four cost category groupings shown in the firstcolumn below (e.g., total manufacturing overhead), which of the various expense items listedacross the top of the table would need to be included? Place an “X” in each expense item thatwould need to be included in calculating the sum for each separate cost category shown, and beaware it’s likely that more than one expense item will apply in each calculation. Note that we arenot actually calculating any values, but are instead simply showing the components for eachaggregated cost category listed. The first cost category (total manufacturing overhead) hasalready been completed for you.Cost CategoryTotal manufacturing overheadTotal product costsTotal prime costsTotal conversion costsDirectMaterialDirectLaborIndirectMaterialIndirectLaborXXOtherManufacturingOverheadXPeriodCosts