Stoney Saure, accountant for Votives, Inc., must group the costs of manufacturing tealights. Indicate whether each of the following items should be classified as direct materials (DM), direct labor (DL), overhead (O), or none of these (N). Also indicate whether each is a prime cost (PC), a conversion cost (CC), or neither (N). Hint: More then one answer per category may apply.
| a. Cost of wax | SelectDM, PCDM, CCDM, PC and CCDM, NDL, PCDL, CCDL, PC and CCDL, NO, PCO, CCO, PC and CCO, NN, NN, PCN, CCN, PC and CCItem 1 |
| b. Depreciation of the cost of vats to hold melted wax | SelectDM, PCDM, CCDM, PC and CCDM, NDL, PCDL, CCDL, PC and CCDL, NO, PCO, CCO, PC and CCO, NN, NN, PCN, CCN, PC and CCItem 2 |
| c. Cost of Gigi’s time to dip the wicks into the wax | SelectDM,PCDM, CCDM, PC and CCDM, NDL, PCDL, CCDL, PC and CCDL, NO, PCO, CCO, PC and CCO, NN, NN, PCN, CCN, PC and CCItem 3 |
| d. Rent on the factory where candles are made | SelectDM, PCDM, CCDM, PC and CCDM, NDL, PCDL, CCDL, PC and CCDL, NO, PCO, CCO, PC and CCO, NN, NN, PCN, CCN, PC and CCItem 4 |
| e. Cost of coloring for candles | SelectDM, PCDM, CCDM, PC and CCDM, NDL, PCDL, CCDL, PC and CCDL, NO, PCO, CCO, PC and CCO, NN, NN, PCN, CCN, PC and CCItem 5 |
| f. Steve’s commission to sell candles to Brightlights, Inc. | SelectDM, PCDM, CCDM, PC and CCDM, NDL, PCDL, CCDL, PC and CCDL, NO, PCO, CCO, PC and CCO, NN, NN, PCN, CCN, PC and CCItem 6 |
| g. Cost of Ramos’s time to design candles for Halloween | SelectDM, PCDM, CCDM, PC and CCDM, NDL, PCDL, CCDL, PC and CCDL, NO, PCO, CCO, PC and CCO, NN, NN, PCN, CCN, PC and CC
Item 7 |
