Lester-Sung, Inc. is a large general construction firm in the commercial building industry. The following is a list of costs incurred by this company:
(1) The cost of an employee for 8 hours at $6.00 an hour.
(2) The cost of insurance for the employees.
(3) The cost of 1,000 board feet of 2×4 lumber.
(4) The CEO's salary.
Required:
Classify each cost above using the following categories:
(a) General, selling, and administrative cost
(b) Direct material
(c) Direct labor
(d) Overhead cost

Question

Lester-Sung, Inc. is a large general construction firm in the commercial building industry. The following is a list of costs incurred by this company:
(1) The cost of an employee for 8 hours at $6.00 an hour.
(2) The cost of insurance for the employees.
(3) The cost of 1,000 board feet of 2×4 lumber.
(4) The CEO's salary. 
Required:
Classify each cost above using the following categories:
(a) General, selling, and administrative cost
(b) Direct material
(c) Direct labor
(d) Overhead cost

Quizplus · Accepted Answer

The Answer of Lester-Sung, Inc. is a large general construction firm in the commercial building industry. The following is a list of costs incurred by this company:
(1) The cost of an employee for 8 hours at $6.00 an hour.
(2) The cost of insurance for the employees.
(3) The cost of 1,000 board feet of 2×4 lumber.
(4) The CEO's salary. 
Required:
Classify each cost above using the following categories:
(a) General, selling, and administrative cost
(b) Direct material
(c) Direct labor
(d) Overhead cost