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In: Accounting

Felix's Fine Jewelry produces fine jewelry for department stores. The following costs incurred by the company...

Felix's Fine Jewelry produces fine jewelry for department stores. The following costs incurred by the company may be classified as direct materials, direct labor, manufacturing overhead, or period costs.

Classify the costs and total by classification.

Prepare an operating income statement which shows the deductions of expense in terms of total classification by category: direct materials, direct labor, manufacturing overhead, or period costs. Assume Felix's Fine Jewelry's revenue for the period was $8,000,000, and there is no change in ending inventory.

a.

Wages paid to jewelry workers

      $1,200,000

b.

Utilities in the administrative area

      300,000

c.

Depreciation on chain linking machinery utilized in the plant

      200,000

d.

Silver, gold, and gemstones used in producing necklaces

4,000,000

e.

Company attorney's salary

      150,000

f.

Lease rental charge on forklift for material and finished goods handling

        10,000

g.

Telephone expense for customer service office

        20,000

h.

Wages of plant heating and cooling technicians

      100,000

i.

Utilities for the assembly area of the plant

      250,000

j.

Temporary administrative assistant help

          1,500

k.

Salary paid to the CEO

      200,000

l.

Environmental waste disposal fines

   1,000,000

m.

Signature red jewelry boxes used for packaging

        50,000

n.

Expedited freight of product to major customer

        50,000

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