Managerial Accounting: P12-2 Estep Construction Company is composed

Managerial Accounting
Problem 12-2
Estep Construction Company is composed of two divisions:
(1) Home Construction and (2) Commercial Construction. The Home Construction Division is the process of building 12 houses and the Commercial construction Division is working on 3 projects.
Cost items of the company follow.
Cost of building permits.
Materials used in commercial construction projects.
Depreciation on home building equipment (small tools such as hammers or saws).
Company presidents salary.
Depreciation on crane used in commercial construction.
Depreciation on home office building.
Salary of corporate office manager.
Wages of workers assigned to a specific construction project.
Supplies used by the Commercial Construction Division.
Labor on a particular house.
Salary of the supervisor of commercial construction projects.
Supplies, such as glue and nails, used by the Home Construction division.

Required:
a) Identify each cost as being a direct or indirect cost assuming the cost objects are the individual products (houses or projects).
b) Identify each cost as being a direct or indirect cost, assuming the cost objects are the two divisions.
c) Identify each cost as being a direct or indirect cost assuming the cost project is Estep Construction Company as a whole.
Powered by