Lucas Manufacturing Has Three Cost Objects That It Uses to Accumulate

question 153

Essay

Lucas Manufacturing has three cost objects that it uses to accumulate costs for its manufacturing plants.They are:
$\begin{array}{ll}\text { Cost object } \# 1: & \text { The physical buildings and equipment } \\\text { Cost object } \# 2: & \text { The use of buildings and equipment } \\\text { Cost object } \# 3: & \text { The availability and use of manufacturing labor }\end{array}$ The following manufacturing overhead cost categories are found in the accounting records:
a. Depreciation on buildings and equipment
b. Lubricants for machines
c. Property insurance
d. Supervisors salaries
e. Fringe benefits
f. Property taxes
g. Utilities Required:
Assign each of the above costs to the most appropriate cost object.

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Definitions:

Indifference Curve

A graph showing different bundles of goods between which a consumer is indifferent, meaning each combination offers the same level of utility or satisfaction.

Highest Possible Price

The maximum price that a product or service can achieve in a market under current conditions.

Lowest Possible Price

the minimum price at which a good or service is offered, considering all factors including cost, demand, and competition.

Income Elasticity

A measure of how much the demand for a good or service changes in response to a change in income.