PROBLEM 1 (Seatwork Midterm)

Classify the following items as direct or indirect materials

1. Direct Material
2. Indirect Material
3. Direct Material
4. Direct Material
5. Direct Material
6. Direct Material
7. Indirect Material

PROBLEM2 (Seatwork Midterm)

Classify the following as manufacturing (M), selling (S), or administrative (A).
1. M
2. S
3. M
4. S
5. A
6. A
7. S
8. A
9. S

PROBLEM 3 (Seatwork Midterm)

Classify each of the following costs of Bug Company in two ways:
a) as variable (V) or fixed cost (F);
b) as inventoriable cost (I) or period cost (P).

a b
Example: Direct Labor V I

1. Salary of company controller F P

2. Fire insurance on direct materials V I
3. Direct materials used V I
4. Factory rent F I
5. Sales commissions V P
6. Overtime premium of machine V I
operators
7. Straight line depreciation of factory F I
equipment
8. Straight line depreciation of trucks F P
used for delivery of sales to
customers
9. Salary of factory supervisor F I

Salary – F
Wages – V

Fire Insurance – Silent – fixed; Unit-basis - variable

PROBLEM 6 (Seatwork Midterm)
The financial statements of Mother Goose Company include these items:
Marketing Cost P160, 000
Direct Labor Cost P245, 000
Administrative Cost P145, 000
Direct Materials used P285, 000
Fixed Factory overhead costs P175, 000
Variable Factory Overhead Costs P155, 000

Compute:
1. Prime Cost

Direct Labor Cost P245, 000

Direct Materials Used P285, 000
Prime Cost P530, 000

2. Conversion Cost

Direct Labor Cost P245, 000

Fixed Factory Overhead Costs P175, 000
Variable Factory Overhead Costs P155, 000
Conversion Cost P575, 000

3. Total Inventoriable/ Product Cost

Direct Labor Cost P245, 000

Direct Materials Used P285, 000
Fixed Factory Overhead Costs P175, 000
Variable Factory Overhead Costs P155, 000
Total Product Cost P860, 000

4. Total Period Cost

Marketing Cost P160, 000

Administrative Cost P145, 000
Total Product Cost P305, 000