1 -

:

1. Payment of booth registration fee at a medical conference to promote new products to physicians
2. Cost of redesigning an insulin syringe to make it less painful
3. Cost of a toll-free telephone line used for customer inquiries about drug usage, side effects of drugs, and so on
4. Equipment purchased to conduct experiments on drugs yet to be approved by the government
5. Sponsorship of a professional golfer
6. Labor costs of workers in the packaging area of a production facility
7. Bonus paid to a salesperson for exceeding a monthly sales quota
8. Cost of FedEx courier service to deliver drugs to hospitals

Required:

Classify each of the cost items (ah) into one of the business functions of the value chain.

Question 2 An Introduction to Cost Terms and Purposes

The following account balances pertain to Peterson Company for the year 2017:

Account balances	01/01/2017	31/12/2017
Direct materials inventory	$21,000	$23,000
Work-in-process inventory	$26,000	$25,000
Finished-goods inventory	$13,000	$20,000
Purchases of direct materials		$74,000
Direct manufacturing labor		$22,000
Indirect manufacturing labor		$17,000
Plant insurance		$7,000
Depreciationplant, building, and equipment		$11,000
Repairs and maintenanceplant		$3,000
Marketing, distribution, and customer-service costs		$91,000
General and administrative costs		$24,000

Required:

1. Prepare a schedule for the cost of goods manufactured for 2017.

2. Revenues for 2017 were $310,000. Prepare the income statement for 2017.

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Question 3 Flexible Budgets, Direct-Cost Variances, and Management Control

. . . 2017:

	6100
	$ 700
	$ 1350000

:

	16	14	$ 224
	3.8	30	$ 114

2017 5100 730 . 400 149 1 000 70 16.42 . 000 17 33.70 . 900 572 . 1200000 . .

:

1. .

2. .