Option #1: Classification of Costs and Income Statement
Felix’s Fine Jewelry produces fine jewelry for department stores. The following costs incurred by the company may be classified as direct materials, direct labor, manufacturing overhead, or period costs.
Wages paid to Jewelry workers
Utilities in the administrative area
Depreciation on chain linking machinery utilized in the plant
Silver, gold, and gemstones used in producing necklaces
Company attorney’s salary
Lease rental charge on forklift for material and finished goods handling
Telephone expense for customer service office
Wages of plant heating and cooling technicians
Utilities for the assembly area of the plant
Maintenance on computers utilized in the administrative assistant’s office
Salary paid to the CEO
Fine paid for introducing cyanide into the local water supply
Signature red jewelry boxes used for packaging
Expedited freight of product to major customer
Classify the costs and total by classification. Assume Felix’s Fine Jewelry’s revenue for the period was $8,000,000 and there is no change in ending inventory. Prepare an operating income statement that shows the deductions of expense in terms of total classification by category: direct materials, direct labor, manufacturing overhead, or period costs.
Provide your answers in clearly organized Excel spreadsheet. Refer to your text to aid you in this assignment.
Check spelling and formatting for readability. All responses must comply with APA.