Classify Each of the Following as Either a Direct Material

question 8

Short Answer

Classify each of the following as either a direct material (DM),indirect material (IM),or period cost (P).
a.Wood used to build custom bookshelves
b.Sandpaper,glue,and nails used to build customer bookshelves
c.Paper supplies used in the administrative offices
d.Computer chips used in computer
e.Cleaning supplies used in the factory

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Definitions:

Cash Payments

Transactions that involve the immediate outflow of cash to settle obligations or purchase goods and services.

Internal Control System

Procedures and processes implemented by a company to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.

Cash Receipts

The total amount of cash received by a company during a specified period from its various business activities.

Cash Payments

Transactions in which payment is made in the form of cash instead of credit.