E1-3

Identify types of cost and explain their accounting.

(LO 2), C

Trak Corporation incurred the following costs while manufacturing its bicycles.

Bicycle components	$100,000	Advertising expense	$45,000
Depreciation on plant	60,000	Property taxes on plant	14,000
Property taxes on store	7,500	Delivery expense	21,000
Labor costs of assembly-line workers	110,000	Sales commissions	35,000
Factory supplies used	13,000	Salaries paid to sales clerks	50,000

Instructions

(a)

Identify each of the above costs as direct materials, direct labor, manufacturing overhead, or period costs.

(b)

Explain the basic difference in accounting for product costs and period costs

E1-12

Prepare a cost of goods manufactured schedule and a partial income statement.

(LO 3), AP

Cepeda Corporation has the following cost records for June 2017.

Indirect factory labor	$ 4,500	Factory utilities	$ 400
Direct materials used	20,000	Depreciation, factory equipment	1,400
Work in process, 6/1/17	3,000	Direct labor	40,000
Work in process, 6/30/17	3,800	Maintenance, factory equipment	1,800
Finished goods, 6/1/17	5,000	Indirect materials	2,200
Finished goods, 6/30/17	7,500	Factory manager's salary	3,000

Instructions

(a)

Prepare a cost of goods manufactured schedule for June 2017.

(b)

Prepare an income statement through gross profit for June 2017 assuming sales revenue is $92,100.

BE5-1

Classify costs as variable, fixed, or mixed.

(LO 1), C

Monthly production costs in Dilts Company for two levels of production are as follows.

Cost	2,000 Units	4,000 Units
Indirect labor	$10,000	$20,000
Supervisory salaries	5,000	5,000
Maintenance	4,000	6,000

Indicate which costs are variable, fixed, and mixed, and give the reason for each answer.

BE5-3

Diagram the behavior of a mixed cost.

(LO 1), AN

For Wesland Company, a mixed cost is $15,000 plus $18 per direct labor hour. Diagram the behavior of the cost using increments of 500 hours up to 2,500 hours on the horizontal axis and increments of $15,000 up to $60,000 on the vertical axis.