ABC Company Makes Wooden Furniture

question 26

Essay

ABC Company makes wooden furniture. Identify each of the following as either an inventoriable product cost or a period cost. If it is an inventoriable product cost, classify it as direct materials, direct labor, or manufacturing overhead.
A. ________ Insurance on the plant building
B. ________ Cost of shipping the furniture to the customers
C. ________ Assembly line workers' wages
D. ________ Depreciation on plant equipment
E. ________ Salesmen's salaries
F. ________ Cost of various types of wood
G. ________ Insurance on delivery trucks
H. ________ Plant forklift operator's salary

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Definitions:

Operating Cash Flow

denotes the cash generated from a company’s normal business operations, indicating whether a company can maintain and grow its operations.

NPV

Net Present Value; a method used in capital budgeting to evaluate the profitability of an investment or project.

IRR

The Internal Rate of Return is a financial indicator utilized to evaluate the potential returns of investments.

Bid Price

The highest price that a buyer is willing to pay for a security.