Your Boat, Inc., assembles custom sailboats from components supplied by various

Exercise 2-1 Classifying Manufacturing Costs [LO1]

Your Boat, Inc., assembles custom sailboats from components supplied by various manufacturers. The company is very small and its entire operations, including its assembly shop and retail sales store are housed in a Gig Harbor, Washington, boathouse. Below are listed some of the costs that are incurred at the company.

Required:

For each cost, indicate whether it would most likely be classified as direct labor, direct materials, manufacturing overhead, selling, or an administrative cost. (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.)

1.	The wages of employees who build the sailboats.
	Direct labor cost Direct materials cost Manufacturing overhead cost Marketing and selling cost Administrative cost

2.	The cost of advertising in the local newspapers.
	Direct labor cost Direct materials cost Manufacturing overhead cost Marketing and selling cost Administrative cost

3.	The cost of an aluminum mast installed in a sailboat.
	Direct labor cost Direct materials cost Manufacturing overhead cost Marketing and selling cost Administrative cost

4.	The wages of the assembly shop’s supervisor.
	Direct labor cost Direct materials cost Manufacturing overhead cost Marketing and selling cost Administrative cost

5.	Rent on the boathouse.
	Direct labor cost Direct materials cost Manufacturing overhead cost Marketing and selling cost Administrative cost

6.	The wages of the company’s bookkeeper.
	Direct labor cost Direct materials cost Manufacturing overhead cost Marketing and selling cost Administrative cost

7.	Sales commissions paid to the company’s salespeople.
	Direct labor cost Direct materials cost Manufacturing overhead cost Marketing and selling cost Administrative cost

8.	Depreciation on power tools.
	Direct labor cost Direct materials cost Manufacturing overhead cost Marketing and selling cost Administrative cost