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Group the costs of manufacturing candles. Indicate whether each of the following items should be classified as direct materials (DM), direct labor (DL), overhead (O), or none of these (N). Also indicate whether each is a prime cost (PC), a conversation cost (CC), or neither (N).
1. Depreciation of the cost of vats to hold melted wax
2. Cost of wax
3. Rent on the factory where candles are made
4. Cost of George's time to dip the wicks into the wax
5. Cost of coloring for candles
6. Cost of Ray's time to design candles for Halloween
7. Sam's commission to sell candles to Candles Plus
Write down the benefits of standard costs and how do businesses set those standards.
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Kristen is unsure about whether she should use her own car or rent a car to go on an extended cross-country trip for two weeks during spring break. What costs above are relevant in this decision? Explain.
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