EXERCISE $1-2$ Classifying Manufacturing Costs $$

The PC Works assembles custom computers from components supplied by various manufacturers. The company is very small and its

assembly shop and retail sales store are housed in a single facility in a Redmond, Washington, industrial park. Listed below are some of

the costs the company incurs.

Required:

For each cost, indicate whether it would most likely be classified as direct materials, direct labor, manufacturing overhead, selling, or an

administrative cost.

The cost of a hard drive installed in a computer.

The cost of advertising in the Puget Sound Computer User newspaper.

The wages of employees who assemble computers from components.

Sales commissions paid to the company's salespeople.

The salary of the assembly shop's supervisor.

The salary of the company's accountant.

Depreciation on equipment used to test assembled computers before release to customers.

Rent on the facility in the industrial park.