Classifying Manufacturing costs (L.0 – 2-1) Boat, Inc. assembles custom sailboats from components supplied by various manufacturers. The company is very small assembly shop and retail sales stores are housed in a Gig Harbor, Washington, boathouse. Below are listed some of the cost that are incurred at the company.
REQUIRED:
Each cost, indicate whether it would most likely be classified direct labor, direct materials, manufacturing overhead, selling or an administrative cost.
a. The wages of employees who build the sailboats.
b. The cost of advertising in the local newspapers.
c. The cost of an aluminum mast installed in a sailboat
d. The wages of the assembly shop’s supervisor.
e. Rent on the boathouse.
f. The wages of the company’s bookkeeper.
g. Sales commission paid to the company’s salespeople.
h. Depreciation on power towels.