Greencut Manufacturing produces energy-efficient lawn mowers for homeowners. Workers at Greencut manufacture the mower bodies from steel

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Greencut Manufacturing produces energy-efficient lawn mowers for homeowners. Workers at Greencut manufacture the mower bodies from steel sheets and then attach a gasoline-powered engine, a blade, a handle, and four wheels to each unit. The following events took place during the month of January:

1. Greencut bought steel sheets (cost, \(\$ 5,000\) ) for constructing mower bodies.
2. Steel sheets (cost, \(\$ 2,000\) ) were removed from raw materials inventory and delivered by forklift operators (total January wages, \(\$ 5,000\) ) to a metal-press machine operator (total January wages, \(\$ 3,000\) ), who pressed the flat sheets of steel into mower housings. Forklift operators delivered the mower housings to an automated painting booth. There, workers (total January wages, \(\$ 2,000\) ) placed the housings onto overhead conveyor hooks that moved through a booth containing robotic paint sprayers. All surfaces of the mower housing were sprayed with paint (total paint cost, \(\$ 1,000\) ). The painted housings moved along the conveyor belt into a dryer that was heated with propane gas (total January gas cost, \(\$ 1,000\) ).
3. After drying, forklift operators transported the painted housings to the assembly area. At the same time, engines, blades, handles, and wheels were removed from the inventory of "purchased parts" (total cost of parts removed from inventory, \(\$ 20,000\) ) and delivered by forklift to the assembly area. Finally, workers installed a motor, a blade, a handle, and four wheels to each housing (total January wages of assemblers, \(\$ 6,000\) ).
4. Greencut estimates depreciation costs on plant equipment to be \(\$ 24,000\) for the month of January.
5. Following assembly, the completed mowers were crated and shipped to retail stores throughout the world.
Required Classify each of Greencut's costs in January as direct material, direct labor, or overhead.

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Managerial Accounting Information For Decisions

ISBN: 9780324222432

4th Edition

Authors: Thomas L. Albright , Robert W. Ingram, John S. Hill

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