The sales staff of Central Media (a locally owned radio and cable television station) consists of two salespeople, Derek and Lawanna. During March, the following salaries and commissions were paid: Derek spends 100% of his time selling advertising. Lawanna spends two-thirds of her time selling advertising and the remaining one-third on administrative work. Commissions are paid only on sales. Required: 1. Accumulate these costs by account by filling in the following table: Exercise 2-37 Products versus Services, Cost Assignment Objective 1 Holmes Company produces wooden playhouses. When a customer orders a playhouse, it is delivered in pieces with detailed instructions on how to put it together. Some customers prefer that Holmes put the playhouse together. Therefore, these customers purchase the playhouse, as well as pay an additional fee for Holmes to install the playhouse. Holmes then pulls two workers off the production line and sends them to construct the playhouse on site. Required: 1. What two products does Holmes sell? Classify each one as a product or a service. 2. CONCEPTUAL CONNECTION Do you think Holmes assigns costs individually to each product or service? Why or why not? 3. CONCEPTUAL CONNECTION Describe the opportunity cost of the installation process. Exercise 2-42 Product Cost in Total and Per Unit Objective 1 Refer to the information for Grin Company above. Required: 1. What was the total product cost in January? 2. What was the product cost per unit in January? Exercise 2-43 Prime Cost and Conversion Cost Objective 2 Refer to the information for Grin Company above. Required: 1. What was the total prime cost in January? 2. What was the prime cost per unit in January? 3. What was the total conversion cost in January? 4. What was the conversion cost per unit in January? The sales staff of Central Media (a locally owned radio and cable television station) consists of two salespeople, Derek and Lawanna. During March, the following salaries and commissions were paid: Derek spends 100% of his time selling advertising. Lawanna spends two-thirds of her time selling advertising and the remaining one-third on administrative work. Commissions are paid only on sales. Required: 1. Accumulate these costs by account by filling in the following table: Exercise 2-37 Products versus Services, Cost Assignment Objective 1 Holmes Company produces wooden playhouses. When a customer orders a playhouse, it is delivered in pieces with detailed instructions on how to put it together. Some customers prefer that Holmes put the playhouse together. Therefore, these customers purchase the playhouse, as well as pay an additional fee for Holmes to install the playhouse. Holmes then pulls two workers off the production line and sends them to construct the playhouse on site. Required: 1. What two products does Holmes sell? Classify each one as a product or a service. 2. CONCEPTUAL CONNECTION Do you think Holmes assigns costs individually to each product or service? Why or why not? 3. CONCEPTUAL CONNECTION Describe the opportunity cost of the installation process. Exercise 2-42 Product Cost in Total and Per Unit Objective 1 Refer to the information for Grin Company above. Required: 1. What was the total product cost in January? 2. What was the product cost per unit in January? Exercise 2-43 Prime Cost and Conversion Cost Objective 2 Refer to the information for Grin Company above. Required: 1. What was the total prime cost in January? 2. What was the prime cost per unit in January? 3. What was the total conversion cost in January? 4. What was the conversion cost per unit in January