Requirement $1$

$1.$ Identify the following as either a product cost or a period cost, and

$2.$ Select the appropriate product cost category, or select expense.

Description Cost Classification Category

Coconut flakes used in the cookies. Product Direct materials $($DM$)$

Depreciation on the ovens. Product Manufacturing overhead $($MOH$)$

Insurance on the computers used in the accounting office. Period Expense

Butter used in cookie dough mix. Product Manufacturing overhead $($MOH$)$

Wages for the bakery security guard. Product Manufacturing overhead $($MOH$)$

Salaries of the bakers who make the cookies. Product Direct labor $($DL$)$

Electricity for the bakery. Product Manufacturing overhead $($MOH$)$

Eggs used in the cookie dough mix. Period Direct materials $($DM$)$

Heating for the corporate headquarters. Period Expense

Sugar used in cookie mix. Product Direct materials $($DM$)$

Freight for shipping the cookies to customers. Period Expense

Salary of the baking supervisor. Period Manufacturing overhead $($MOH$)$

Sanitary gloves worn by bakers. Product Manufacturing overhead $($MOH$)$

Flour used for baking the cookies. Product Direct materials $($DM$)$Requirement $3$: Complete the Cost of Goods Sold schedule.

freemont Troll House cookies

Schedule of Cost of Goods Sold

month ended march $31,2024$

Compute the predetermined overhead allocation rate for fiscal year $2024$ assuming a plant$-$wide rate is used.

Predetermined overhead allocation rate $=$ Total estimated overhead costs $/$ Total estimated machine hours

$$80,000\mathrm{.}00$ Total estimated overhead costs

$400$ Total estimated direct labor hours

$$200$ Predetermined overhead allocation rate

$500$ Actual direct labor hours used

$Account$/$Explanation Debit Credit

Purchased materials on account, $$115,500$

Used materials $($direct and indirect$)$

Manufacturing wages incurred, $$100,000$

Record oven depreciation for the year

Incurred other manufacturing overhead on account

Allocated manufacturing overhead for the year.

Use rate calculated in step $4$ and actual direct labor hours used.

Record Cost of Goods Manufactured from $2\_$COGM

Record revenue from sale of $100,000$ cookies on account.

Record Cost of Goods Sold from $3\_$COGS$200,000$ MOH Allocated