Nature & Scope of cost Accounting

  1. Depreciation on salespersons’ cars.
  2. Rent on equipment used in the factory.
  3. Lubricants used for maintenance of machines.
  4. Salaries of finished goods warehouse personnel.
  5. Soap and paper towels used by factory workers at the end of a shift.
  6. Factory supervisors’ salaries.
  7. Heat, water, and power consumed in the factory.
  8. Materials used for hosing products for shipment overseas. (Units are not normally

boxed).

  1. Advertising costs.

10.Workers’ compensation insurance on factory employees.

11.Depreciation on chairs and tables in the factory lunchroom.

12.The wages of the receptionist in the administrative offices.

13.Lease cost of the corporate jet used by the company’s executives.

14.Rent on rooms at Pearl Continental resort for holding of the annual sales conference.

15.Attractively designed box for packaging the company’s product — breakfast cereal.

Solution:

Product                Period

(Inventoriable)            Cost

Cost

I. Depreciation on salespersons’ cars.                                                              X

  1. Rent on equipment used in the factory.                                 X
  2. Lubricants used for maintenance of machines.                       X
  3. Salaries of finished goods warehouse personnel.                  X
  4. Soap and paper towels used by factory workers at the         X
    end of a shift.
  5. Factory supervisors salaries.                                                  X
  6. Heat, water, and power consumed in the factory.                 X
  7. Materials used for hosing products for shipment                    X
    overseas. (Units’are not normally boxed).
  8. Advertising costs.

10.Workers’ compensation insurance on factory                         X
employees.

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