Describe the overtime-premium and idle-time categories of indirect labor.
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Inventoriable costs versus period costs. Each of the following cost items pertains to one of these companies: Best Buy (a merchandising-sector company), KitchenAid (a manufacturing-sector company), and HughesNet (a service-sector company): a. cost of phones and computers available for sale in Best Buy's electronics department b. Electricity used to provide lighting for assembly-line workers at a KitchenAid manufacturing plant c. Depreciation on HughesNet satellite equipment used to provide its services d. Electricity used to provide lighting for Best Buy's store aisles e. Wages for personnel responsible for quality testing of the KitchenAid products during the assembly process f. Salaries of Best Buy's marketing personnel planning local-newspaper advertising campaigns g. Perrier mineral water purchased by HughesNet for consumption by its software engineers h. Salaries of HughesNet area sales managers i. Depreciation on vehicles used to transport KitchenAid products to retail stores 1\. Distinguish between manufacturing-, merchandising-, and service-sector companies. 2\. Distinguish between inventoriable costs and period costs 3\. Classify each of the cost items (a-i) as an inventoriable cost or a period cost. Explain your answers.
Define cost object and give three examples.
Describe how manufacturing-, merchandising, and service-sector companies differ from one another.
What is the relevant range? What role does the relevant-range concept play in explaining how costs behave?
Computing cost of goods purchased and cost of goods sold. The following data are for Marvin Department Store. The account balances (in thousands) are for 2017 . Marketing, distribution, and customer-service costs \(\quad\) \(\$ 37,000\) Merchandise inventory, January 1, 2017 \(\quad\) 27,000 Utilities \(\quad\) 17,000 General and administrative costs \(\quad\) 43,000 Merchandise inventory, December 31,2017 \(\quad\) 34,000 Purchases \(\quad\) 155,000 Miscellaneous costs \(\quad\) 4.000 Transportation-in \(\quad\) 7,000 Purchase returns and allowances \(\quad\) 4,000 Purchase discounts \(\quad\) 6,000 Revenues \(\quad\) 280,000 1\. Compute (a) the cost of goods purchased and (b) the cost of goods sold. 2\. Prepare the income statement for 2017.
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