In: Accounting
Little League Baseball Manufacturer
The Little League Baseball Manufacturer purchases materials for the production of customized little league baseball bats, hires workers to convert the materials to customized finished baseball bats, and then offers the customized baseball bats for sale to little league teams and the general public.
1. Refer to Little League Baseball Manufacturer.
Manufacturing costs such as cleaning supplies which are not easily traced to a specific customized baseball bat fall into which of the following categories?
a. |
direct material costs. |
b. |
direct labor costs. |
c. |
manufacturing overhead costs. |
d. |
opportunity costs. |
2. Refer to Little League Baseball Manufacturer.
Manufacturing costs, such as the wages for janitorial staff to sweep and mop the floors, that are not easily traced to a specific customized baseball bat fall into which of the following categories?
a. |
direct material costs. |
b. |
direct labor costs. |
c. |
manufacturing overhead costs. |
d. |
opportunity costs. |
3. Refer to Little League Baseball Manufacturer.
Manufacturing costs such as the cost of the high quality hard woods specifically selected by the customer for producing their own customized baseball bat fall into which of the following categories?
a. |
direct material costs. |
b. |
direct labor costs. |
c. |
manufacturing overhead costs. |
d. |
opportunity costs. |
Solution 1 - (c) Manufacturing Overhead Costs
Cost of Cleaning Supplies which are not traceable to specific customized baseball or not directly or readily identifiable with the finished product i.e. customizes Baseball is Manufacturing Overhead costs
Solution 2 - (c) Manufacturing Overhead costs
Wages paid to Janitors staff to sweep and mop the floors is not specifically traceable to Manufacturing of the product or is not directly related to The manufacturing process of the product or is not readily identifiable to product is Manufacturing Overhead cost
Solution 3 - (a) Direct Material costs
Cost of Using high quality hard woods for making the customized baseball as per instructions of customer is direct material cost. Since use of Hard wood is directly relatable to product and will be used in the manufacturing process of the product. Without Hard wood, such baseball can not be made hence such cost is identifiable to production process.
Some Definitions -
Direct Labour - Direct labour cost is the payroll expenses ot factory wages incurred and are specifically assignable with the Product or are directly related to the manufacturing of the product
Opportunity cost - cost of losing the benefit of one alternative on selecting the some other alternative.