ABEL FACTORY TOUR
Your class had a field trip to Abel factory that manufactures furniture.
Materials- What materials were used in the factory. Follow guidelines and definitions given in the textbook. Give reasons for your choice.
Labor- List all types of employees that you might find working in the shop. Follow guidelines and definitions given in the textbook. Give reasons for your choice
Overhead- List all items whose cost might be classified as overhead cost. Follow guidelines and definitions given in the textbook. Give reasons for your choice.
A cost object is generally defined as anything for which managers wish to accumulate costs. It can be a territory, a region, a division, a department, a product, a
process or a service. Costs as they relate to a cost object can be either Direct or Indirect as defined in your textbook. These same costs can either be Variable or
Fixed. Without a cost object you cannot define any of the above concepts.
In Abel furniture manufacturing facility, identify costs that would be classified as Direct costs or Indirect costs and these costs can further be classified as
Variable or Fixed Remember classification of costs as either variable or fixed is based on the definition or identification of a
1. Identify the Cost Object
2. Classify the costs listed below as follows:
1. Direct or Indirect
2. Variable or Fixed and give reasons for your choice.
2. Cloth or leather
5. Glue, abrasives, grease,
6. Carpenter’s wages
7. Janitor’s wages
8. Cafeteria workers
9. Clerical staff wages
9. Utilities, including water, electricity, heating, cooling.
10. Property taxes
11. Depreciation of factory building
12. Depreciation of factory machinery
13. Depreciation of filing and other office furniture in the factory
14. Snow removal
15. Maintenance of parking lot
16. Security guard’s wages
17. Landscaping for the factory property
18. Land on which the factory is built.
19. Maintenance of fish pond
20. Factory supervisor’s salary.
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