Manufacturing, Cost Classification, Product Costs and Selling and Administrative Costs, Income Statement

Label and Amount Descriptions

Cost Classification

Income Statement

Instructions

Pop's Drive$-$Thru Burger Heaven produces and sells quarter$-$pound hamburgers. Each burger is wrapped and put in a "burger bag," which also includes a serving of fries and a soft drink. The price for the burger bag is $$3\mathrm{.}50.$ During December, $10,000$ burger bags were sold. The restaurant employs college students part$-$time to cook and fill orders. There is one supervisor $($the owner, John Peterson$).$ Pop's maintains a pool of part$-$time employees so that the number of employees scheduled can be adjusted to the changes in demand. Demand varies on a weekly as well as a monthly basis.

A janitor is hired to clean the building early each morning. Cleaning supplies are used by the janitor, as well as the staff, to wipe counters, wash cooking equipment, and so on $.$ The building is leased from a local real estate company; it has no seating capacity. All orders are filled on a drive$-$thru basis.

The supervisor schedules work, opens the building, counts the cash, advertises, and is responsible for hiring and firing. The following costs were incurred during December$-$

Hamburger meat

Buns, lettuce, pickles, and onions

Frozen potato strips $$4,500$

$800$

$1,250$